PERSONAL PROPERTYWild Animals: If wild animals (ferae naturae) are captured, they belong to the captor. But capture is required; merely chasing the animal is not enough. (Pierson v. Post). If animal is mortally wounded, or caught in a trap so that capture is certain, the hunter acquires a right of possession and title that may not be defeated by another’s intervention. Reasoning behind this rule: foster competition; reward the capturer and ease of administration

A. Wounded or trapped Animals: Title to wild animals can be acquired through possession. Pursuit is not enough unless an animal is mortally wounded or trapped so the capture is virtually certain, the animal is treated as captured. But if the animal is only in the process of being captured and the door has not snapped shut, it has not been captured

1. If A has driven a school of fish into a net and is in the process of encircling them but they could still escape, A has not captured the fish. Until the net is closed, B can take the fish. Young v. Hichens

2. To trap or net a wild animal, the animal must be confined in an enclosure, but it is not necessary that there be absolutely no possibility of escape. The captor acquires possession if he uses reasonable precautions against escape. Fish in A’s net, which has a small entrance, from which escape is possible but unlikely, are possessed by A. B who removes fish is guilty of larceny. State v. Shaw

B. Interference by Noncompetitor: A person who does not want to capture animal cannot interfere.

1. A puts out decoys on his pond to attract ducks and sets net to catch them, B, a neighbor cannot shoot gun to scare ducks away. Keeble v. Hickeringill

C. Custom: While general rule is that captor must acquire physical possession over the animal, in some hunting trades, a custom which is thought as more effective for getting animals killed, may stand as the rule.

1. Among whalers, custom was to award the one who first killed the whale, even though it didn’t turn up till days later. Crts recognized custom as giving possession. Ghen v. Rich

D. Escaped Wild Animals: If a captured wild animal that is not domesticated/ does not have a habit to return, escapes, the captor loses possession. Once have possession of a wild animal, you are liable for the damages

E. Minerals: Minerals such as oil and natural gas are akin to wild animals in that they move underground irrespective of property lines. Under rule of capture, property owner who drilled eg oil was entitled to keep it even if it flowed from the property of another. This did not work well for scarce resources. Cost of pumping oil was cheaper than its market value incentive to get your before someone else takes it; could lead to overproduction of oil.

Pierson v. Post (1): Post kills fox, knowing that Pierson was hunting it Trespass v. trespass on the case: Post couldn’t have brought an action based on trespass

because there was no interference of the body (if he had tripped him may have been different)

Rule: Property in wild animals is acquired through occupancy/ possession only. Pursuit does not fall under the category of possession unless the animal is mortally wounded or the pursuer deprived the animal of its natural ability and brought it under his control

Dissent: defer to the sportsmenBuster v. Newkirk (6): Newkirk (P) shot, but did not mortally would deer. P resumed pursuit the next morning and then D shot it and took it. P brought action of trover (common law pleading to recover damages for a wrongful taking of property or to recover actual possession of the property) against D

Rule: same as Pierson +mortal wounding is not necessarily enough, need pursuit Three elements of occupancy: 1) pursuit; 2) mortal wounding; 3) practical inevitability

(Liesner v. Wannie) Crt: found for Buster (D) because P did not mortally wound the animal, evidenced by the

fact that it got up and ran awayKeeble v. Hickeringill (8): Decoy pond

Differs from Pierson because P (Keeble) owned the property (ducks were in his possession by being in his pond) making D a trespasser. Or could distinguish by nature of act: this act is malicious and Pierson is about fair competition

Damages awarded because interfered w/ P’s livelihood In Pierson, majority attaches a ratione soli (by reason of the soil), argument to this case to

bolster his argument. This crt doesn’t mention ratione soli. Could say it’s about livelihood and not ratione soli, because it’s about unlawful interference. Counter: it makes a difference that Keeble owned the land.

Dapson v. Daly (10): P and D hunting deer. P shot deer, but D makes the fatal shot Deer goes to D, under Pierson Crt uses second argument that P did not have a license to bolster case; lack of license is

analogous to trespassing. Could also argue that a wrongdoer cannot acquire possessionState of Ohio v. Shaw (11): D took P’s fish, from net w/ small opening

Practically inevitable that P would have possession. Liesner Sollers v. Sollers: fish trapped in an inlet; found no possession Possible differences bt the two: Shaw: 1) private property; 2) fisherman/ net. But, hard to

see difference in possession. *Often a difference bt dropping a net and going fishingGhen v. Rich (14): Whale case (action in admiralty). Respondent is a bona fide purchaser; didn’t necessarily know that Ellis didn’t have a right to the whale (this ends up being irrelevant)

P killed whale and did as much as he could to possess Requires and act of will to abandon something Custom, if widespread and or long duration can go toward what is meant by possession

(this doesn’t apply to other whales); helps that this custom is based on industry. Why wouldn’t custom apply in Pierson? No industry based on that custom

Conversion: interference w/ property rights of true owner. Respondent converted the whale and subsequently has to pay twice for it; a purchaser doesn’t have superior rights than true owners

State of North Dakota v. Dickinson Cheese Co., Inc (17): P brought action to recover for fish that died in public waters as a result of D polluting water. Issue: whether state had property rights in fish, such that can recover damages.

State only controls the fish for regulating enjoyment and use; not enough property rights in fish to sustain an action

In Pierson said need intention to appropriate animal to individual use and deprive it of natural liberty. There was no intention in this case.

Classifying Property as Real or Personal: Real property includes land and any structures built on it. Personal property included all other kinds of property.

A. Crts struggle with the distinction between real and personal property:1. Lease personal property2. Furnace in basement seems like personal property, but it’s a fixture and

passes w/ the land and is real property3. Tree if natural, real; if planted, chattel

B. Replevin: general action to recover personal propertyC. Distinction makes a difference in terms of how = transferred, what statue of

limitations applies, what form of action is used, how passes w/ deathD. Categories of chattel:

1. Contracts2. Gifts (different form #1 because of lack of consideration)3. Trust: relationship where a trustee holds property for the benefit of someone

else4. Last will and testament: Gratuitous, like gift

a. formal document and has to be in compliance w/ certain formb. if do not meet previous requirement will is invalid

Haslem v. Lockwood (18): P gathered manure on public highway into piles, intending to come back and get it. D took it, claiming it was abandoned.

Crt says that manure is personal property so goes to the one first in possession. P spent time, which increased its value, which changed its nature. Distinction is important because real property cannot be abandoned, personal property can be. (Can’t bring trover for real property; have to bring trespass)

Crt acknowledged that owner of the highway would have a claim, but under Dickinson Cheese could say have right to regulate, but not to ownership. Counter: burough owner maintained and had a property right in the street

Similar to Keeble; interference with livelihood; but difference is that this is public property and different underlying themes: Keeble (ratione soli because it was private property) and this case is about physical taking; both about occupancy, but nature of the occupancy is different

Goodard v. Winchell (21): P owned land, in which Elickson has privilege. Aerolite fell on P’s land. Hoagland dug it up in Elickson’s presence and sold it to D

Crt says that movables means things that are not naturally of this earth and that aerolite is not a movable object; P wins because he is the owner of the land; aerloite became part of the land

Know it is personal property because it’s an action of replevin (general action to recover personal property)

Misleading because judge talks as if it’s real property; its personal property that goes w/ the land and was abandoned, so goes to owner of the land

Finder’s Rights: An owner of property does not lose title by losing the property. The owner’s rights persist even though the article has been lost or mislaid. However, a finder has rights superior to everyone but the true owner (there are exceptions to this rule)

A. Definitions:1. Lost: personal property whose possession has been parted w/ unconsciously

or involuntarily. Rights: Finder has rights against all but true owner2. Mislaid: personal property which has been intentionally placed somewhere

and then unintentionally left or forgotten: Rights: Finder is not entitled to retain possession as against the owner of the land in which the property was found (locus in quo)

3. Abandoned: property that is no longer in the possession of the prior possessor who has intentionally given up the property. Rights: Finder is generally entitled to not only possession, but ownership against all others. *W/ territorial waters (shipwrecks) may belong to the state

4. Treasure Trove: consists of coin or money concealed in the earth or another private place w/ the owner unknown. Rights: treated as lost property and belongs to the finder.

B. Finder has rights against every one but rue owner. Eg A finds jewel and takes it to a jeweler to get it appraised. The jeweler refuses to give it back to A, saying A does not own it. A can recover either the jewel or the value of the jewel. If A after finding the jewel, loses it and B finds it, A, the prior possessor prevails over B. Armory v. Delamirie

1. Policy arguments in favor of rule: protecting a finder that reports rewards honesty; rewards labor

2. This rule applies when objects are attained through theft or trespass. If A steals a jewel and hands it to B, who refuses to return it, B is liable to A. Anderson v. Gouldberg

3. Acquiring Abandoned Property: For a finder to become a possessor, finder must acquire physical control over the object and have an intent to assume dominion over it; may also have to give notice

Eg. A discovers a shipwreck at the bottom of a river. Ship was abandoned by the owners. A attaches a buoy to wreck, intending to return the next day but does not return. B finds wreck and takes it. B prevails over A because A has shown an intent to take it and did not take actual physical control. Eads v. Brazelton

4. A person is in constructive possession when the law treats him as if he had possession when he is unaware of it; landowner is in constructive possession of objects located under the surface of her land even though she is unaware of the objects

A hires B to clean pool and B finds ring. Ring belongs to A even though A was unaware ring was there. South Staffordshire Water v. Sharman

C. Finder v. Owner of Premises: often the finder will claim an object and so will the owner of the premises where the object is found (where owner of premises is not the owner of the object). Owner of premises usually claims constructive possession

1. Finder is Trespasser: If finder is a trespasser, the owner of the premises always prevails over the finder. Favorite v. Miller

2. Finder is employee: If the finder is an employee of the owner of the premises, some cases hold that the employee cannot keep the object. Some crts reason that an employee is acting for an employee

3. Finder is on premises for a limited purpose: If the finder is on the premises for a limited purpose (eg cleaning out a stopped sewer drain), it may be said that the owner gave permission to enter only for a limited purpose of cleaning, under the direction of the owner, and the owner of the premises is entitled to objects found. South Staffordshire

4. Object found under the soil: If object is found under or embedded in the soil, it is awarded to the owner of the premises, not to the finder. Rationale: Owners of land expect that objects found under the soil belong to them; they think of these objects as part of the land itself; real property. Goodard v. Winchell

Exception- treasure trove: Treasure trove is found gold silver or money intentionally buried or concealed in the soils with the intent of returning to claim it

5. Object found in private home: Objects found inside a private home is usually awarded to the owner of the home.

Owner not in possession: if the owner of the house has not moved into the house (or not made it his personal space) it has been held that the owner of the house is not in constructive possession of articles therein of which he is unaware. Hannah v. Peel

6. Object found in Public Place: In dealing with object found on a public place, crts have generally resolved the issue by resorting to the lost- mislaid distinction

Lost-mislaid distinction: Lost property is property that the owner accidentally and casually lost. Mislaid property is property intentionally placed somewhere and then forgotten

Lost property goes to the finder rather than the owner of the premises Mislaid property goes to owner of premises Rationale: the purpose of classifying property as mislaid is to

facilitate the return of the object to the true owner: since it is assumed the object was intentionally placed where it is found, it is likely that the true owner will remember where she placed and will return to the shop to claim it.

Eg. A finds a wallet on the floor and a ring on the counter: wallet is lost and ring is mislaid

Eads v. Brazelton (25): Acquiring Abandoned Property: P went to site where boat sank and cargo was abandoned. P fastened a buoy around it and left. While he was detained by buisness, D took it. P claims right if occupancy via his actions

Occupation requires taking possession of the property by exercising dominion or control over it. Marking trees, etc doesn’t equate to possession

Related to Ghen.

Previous cases seem to say: once establish possession, don’t lose it if you go somewhere else. Now seem to require persistent efforts. This can be explained: he never established possession OR possession needs to give notice

Abandonment = Time + Activity (need intent to abandon)Armory v. Delamirie (30): P found jewel in chimney and apprentice stole the stones

Rule: finder, though he doesn’t have absolute property has such a right that will enable him to keep it against all but the rightful owner

Master is responsible for apprentice (apprentice probably took jewels) Damages: crt finds damages for highest value

Clark v. Maloney (30): P found logs secured w/ rope at a creek. D took them and claimed they found them floating in creek

P took possession by securing logs Just as rightful owner would have a claim against P, subsequent loss does not meant that

P lost his rights Opposite of law of wild animals once animal is free, no longer in possession

Barker v. Bates (31): Timber went ashore and lodged in P’s land. D went onto land and took timber

D trespassed when took timber; *Note: don’t always assume that a trespasser will always lose and anon-trespasser will always win

Neither P nor D claimed title, but P has preferable right of possession because has title to soil

P has right to recover the agreed value of timber in his claim for damagesSouth Staffordshire Water Co. v. Sharman (33): While cleaning pool D found gold rings

Possession of land carries w/ it general possession of everything attached to or under the land; awareness makes no difference

P employed D Hannah v. Peel (35): P stationed in unoccupied house found broach and took it to police and got a receipt. Two years later original owner had not claimed it and was given to D who sold it. P demanded broach.

Finder of lost article (broach was not mislaid) is entitled to it against all other persons, except the true owner

Favorite v. Miller (40): D went on P’s property, knowing it was private property, to get part of old, valuable statue with metal detector. P found out through newspaper that it was sold to museum for lots of $

Item was imbedded in soil, mislaid and not lost, and D was a trespasser Seems like crt rewards luck rather than hard work (boy in Hannah) got lucky; or maybe

rewarding honesty

Bailments: The transfer of possession of personal property to a person who is not its owner for a limited purpose. The true owner is a bailor; the person in possession is a bailee. The bailee has the duty to care for the goods and deliver them to the owner as agreed. A bailment arises when O leaves an appliance with an electrician for repair, checks a coat, has furniture removed by a moving company. In each case O is a bailor. These bailments arise out of consensual arrangements of the two parties. But bailments can also arise from involuntary possession

A. Creation: To create a bailment, the alleged bailee must assume actual physical control with intent to posses. Since a bailee has duties and liabilities, courts define

“physical control” and “intent” in such a way as to carry out the expectations of the parties and to be fair.

1. Actual Physical Control: to have a bailment, must have actual, physical control.

If A parks his car in a lot and retains the keys and does not deliver the car to the attendant, some older cases hold no bailment is created. Newer cases, however hold that a bailment is created in a park and lock garage. Allen v. Hyatt Regency

A person who has custody not possession is not a bailee. Ordinarily a bailee can be liable for goods which he has actual

knowledge, but if bailee assumes possession of one good in which another might reasonable be contained, the finder-bailee can be held liable if he negligently returns both goods to wrong person

2. Intent: the bailee must have an intent to exercise physical control, and in consensual arrangements the bailor must intend to give up the right to possess the object.

Mistake as to contents: if a person is mistaken as to the contents of the parcel, he may not be deemed in possession of the contents of the parcel even though he is in possession of the parcel. Eg O gives A a parcel, which unbeknownst to A has drugs in it. If A is arrested, did not break the law, because of lack on intent

Value undisclosed to the Bailee: if a bailor gives an article to a bailee but does not disclose the exceptional value of the article, a bailment is created. The risk of caring for the article in its true value is put on the bailee when he accepts possession of the article. Ring case: Peet v. The Roth Hotel

B. Duties of Bailee: 1. Duty to Exercise Care: generally, all bailees are under a duty to exercise care

over the bailed goods, but the standard of care varies with the type of bailment. Traditionally, degree of care depends on who is benefited

Bailment for sole benefit of bailee extraordinary care (eg borrow a lawnmower); liable for even slight negligence

Bailment for mutual benefit of bailor and bailee ordinary care; Bailment for sole benefit of bailor slight care; the bailee is liable

only for gross negligence2. Duty to Redeliver: Regardless of the standard of care required of bailee, he is

held to strict liability when it comes to redelivery. If the bailee misdelivers the goods to the wrong person he is stuck with liability even though he used reasonable care.

Exception: An involuntary bailee is liable only if the bailee was negligent in delivering the goods to the wrong person. Crts impose strict liability on the ordinary bailee because he is in breach of contract when he misdelivers. But an involuntary bailee had no contract and has a lesser liability.

Eg. A and B are investment brokers. A’s agent brings a bond to B’s office and drops it in the slot. B picks it up sees it’s the wrong bond

and calls for A’s agent. C (faker) responds and takes bond. As an involuntary bailee B can be held liable only if negligence is shown. Cowen v. Pressprich

At common law a bailor who entrusted goods to a bailee under such circumstances that a reasonable person could believe that the bailee was the owner of the goods is estopped from claiming the goods from a bona fide purchaser. Why? It is inequitable to hold the innocent purchaser liable because of the wrongdoing of the bailee.

C. Things that are Similar to Bailment1. Debt: taking $ to bank is not a bailment; don’t keep actual bills. If bank is

robbed, get $ no matter what. 2. Agency: sales clerk is agent for Marshall Fields has custody of item, but

bailments have more freedom3. Chattel Mortgage: Contract/ deal eg buying a car; as long as pay, General

motors can’t take it back. Bailor has right to take back at anytime4. Lease: eg storage places lease if space where leasee has right to use

secured space5. Sale: transaction where title passes to the purchaser6. Custody: when the owner of goods places then in actual physical control of

another w/ no intent to relinquish the right or dominion over them

Pete v. Roth Hotel (45): P gave cashier ring, in envelope w/ name on it so jeweler could pick it up. It was lost and was not reported. One month later P found out it was gone.

Crt says 1) A bailment was created; it was reciprocally beneficial to both parties and in the regular course of business (this is kind of a stretch). If the object was concealed, then there was no bailment. In another case a bailee did not know value of coat (fur was concealed) and no bailment was created. This case is different because ring was in an envelope, so had to know something was in there. Rule: Possession requires intent to control and possess as well as control in fact. Delivery and acceptance of ring creates a bailment even though the receiver was ignorant of the true value of the ring, so long as bailee could have ascertained the value. Bailee has a responsibility to redeliver the item; if they don’t, responsible for full value of the item

Burden of proof: 1) Bailee has to prove his own due care; if can’t explain or meet the standard, P wins. 2) Bailee has to show what happened and when they do, the burden shifts back to P to show they were negligent; Bailor generally must show lack of ordinary care by bailee (this is impractical,; hard to know why they messed up so proving delivery of the chattel and failure to redeliver is enough). Then bailee has to explain its failure to deliver or show that they exercised due care.

Degrees of Care: Type of bailment depends on type of bailmentRoman Law: 1) slight negligence (if give keys and let drive car; strictly for your benefit); 2) ordinary negligence (if give keys and pay $5 mutual benefit); 3) gross negligence (if ask hold keys and lose them)

Allen v. Hyatt Regency (50): P parks car in attended garage w/ single entrance and exit (ticket required) and security guards. Car gets stolen. On ticket says garage is not responsible for theft of cars. Main issue: possession

Bailment: a delivery of personal property by one person (bailor) to another (bailee) who holds the property for a certain purpose under an express or implied- in-fact K

Crt says there was a bailment; operator assumes control of parked cars by limiting access and requiring a ticket (ticket was just to keep time)

Failure to return car was evidence of prima facie negligence Dissent: No bailment P had the duty to prove affirmatively the negligence of the

operator of the parking garage, which he failed to do. Distinguishing factors if bailment: 1) delivery 2) acceptance/ relinquishment of P’s exclusive possession and control. P had the keys so D did not have control; conduct overrules words on ticket

Cowen v. Pressprich (59): P sent a runner to deliver a bond that had been sold to D. Runner gave wrong bond and left. D gave it back to who he thought was the runner and the bond was never found. Issue: whether D assumed enough control as an involuntary bailor to be treated as a voluntary bailor and therefore be liable

Involuntary bailee: as long as his lack of volition continues, does not have duty of care even if gross negligence, but if involuntary bailee exercises dominion over object, responsible as if voluntary bailee; Absolute liability in conversion for misdelivery, applicable to bailees generally, is not applicable to involuntary bailees.

Crt says no possession Dissent: it was D’s mistake; returning it back to the wrong messenger

Gifts: a voluntary transfer of property without any consideration. A gift is a present transfer of an interest in property. If the transfer is to take effect in the future, it is a mere promise to make a gift and unenforceable because of the lack of consideration. But the present gift of either a present or future gift is valid. Gift in a will is a devise. Gifts are irrevocable unless expressed otherwise* Note in transfers of chattel there are 4 different categories: 1) Contracts; 2) Gifts (distinguishable from ks because of lack of consideration); 3) Trust (trustee holds the property for benefit of someone else); 4) Last will and testament (like will/ gratuitous a) formal document and has to be completed in compliance w/ certain form b) if don’t meet a, it’s invalid

Gift inter vivos: “during life gift;” gift made during the donor’s life when the donor is not under any threat of impending death. Once it is made it is irrevocable.

Gift causa mortis: gift made in the contemplation of immediately approaching death. Crt may be more strict with these gifts because there is greater danger of fraudulent claims since the donor is dead and cannot speak; they represent an invasion of the policies underlying the Statute of Wills that transfers that are not complete until death should be evidenced by a writing and witenesses. It is revocable by the donor at any time before death. It is automatically revoked if the donor recovers. In practical effect, it is a substitute for a will.

Three requirements for a gift of chattels: 1) donor must intend to make a gift 2) the donor must deliver the chattel to the donee 3) the donee must accept the chattel. Almost all litigation concerning gifts deals with the delivery. *Note: w/ transfer of real property it has to be in writing (Statute of Frauds) but w/ chattel it can be oral

A. Intent: The donor must pass title presently and not merely transfer possession. In the absence of a deed of gift, intent will need to be shown by extrinsic evidence. Promise to give property in the future is not a gift. A gift transfers title to the donee right now

B. Delivery: In an oral gift, delivery of the chattel is required. Irons v. Smallpiece. Delivery to a third person for delivery to donee satisfies the requirement of donor intended party to act as an agent or trustee for donee. Reasons for delivery requirement:

Ritual: delivery impresses the grantor with the legal significance and finality of the act.

Evidentiary: Delivery of the chattel is reliable, objective evidence of the grantor’s intent to give.

Protective: Requiring delivery protects the barely incompetent donor form making improvident oral statements

C. Symbolic Delivery: Where actually delivery is impractical because the chattel is too large, or the situation will not permit it, symbolic delivery (handing over some object that is symbolic of the thing given) is allowed. Most common is an instrument of writing.

Exceptions: Something (eg a debt) not evidenced by a written instrument can be transferred by a written assignment. A remainder interest, which has no physical existence, can also be transferred by a written assignment. Gruen v. Gruen

If donee is given means to gain access to gift, requirement is satisfied.

Irons v. Smallpiece (69): Verbal gift of 2 colts made by P’s father to P. Colts remain in father possession until his death; colts never came into hands of son. P found price of hay for colts. Father agreed to give colts as much hay as they needed for a set price to be paid by the son. None of the hay was given till w/ in couple of days before dad’s death

In order to transfer property there must either be a deed or instrument of the gift or there must be actual delivery

Gruen v. Gruen (71): P’s father wanted to give P a painting, but wanted to continue to use it for the rest of his life. Father sent son a letter which he was told by lawyer to destroy for tax purposes. D says the gift was not valid in terms of the formalities of the will and that a donor may not make an inter vivos gift or chattel and retain a life estate w/ complete right of possession

Don’t need physical transfer to fulfill delivery requirement; symbolic delivery of letter is enough

Title of Retention of Possession: if have chattel, have to transfer it, but if going to give rights in the future, no need to give it up now; would be inconsistent w/ the purpose of a gift.

Not a gift causa mortis because 12 months before; has to be in mind that going to die Unlawful v. lawful destruction of evidence irony: case would have been stronger if the

lawyer hadn’t given them advise. *Read notes on engagement ring problem (in general man can recover the ring because under close understanding of the requisite intent crt have held that he did not intend to give ring to relinquish his control over the ring until they were married)

Woo v. Smart (78): P, administer of estate, said that D’s checks from her life long partner were not effective gifts because they were not cashed before partner’s death.

In causa mortis there is a high standard of delivery; encourage people to make wills At first, seems strange: here handed the checks no delivery; Gruen: nothing handed

over delivery Uniform Commercial Code; statue passed to protect the bank, so delivery means actual

cashing of checks. Check could not be seen as deed of gift (akin to Irons) because the UCC says checks are

not assignments If want to make a gift at the time of death, have to comply w/ Statue of Wills Distinction between Woo and Gruen: Gruen son had remainder interest subject to life

estate of father; Woo check is not remainder interest because the check is valid now; there is no future interest; distinction bt conveyance of a present gift, which is going to take place immediately and a future gift in which delivery takes place later

Unauthorized Possession and Bona Fide Purchasers: BFP is one who does not know of the seller’s wrongful possession but has a good faith belief that the seller has title, and in addition pays valuable consideration. A BFP is protected under the following exceptions to the general rule, but a buyer who is not a BFP is never protected. To be a BFP, a purchaser must have no actual notice of the seller’s wrongful title, nor any inquiry notice (notice that the purchaser is deemed to have when the facts and circumstances should lead a reasonable person to these inquiries).

A. General Rule is that the seller can transfer no better title than he has. If the seller does not own the object or lawfully represent the owner, the buyer does not get title.

B. Exceptions to Rule:1. Seller has voidable title: A voidable title is one the owner can void. If the

seller has a voidable title he can transfer a good title to a BFP. Policy behind rule: where there are one of two innocent persons who could have prevented the harm to the other should suffer the loss

2. Estoppel: If the owner of the goods by words or conduct expressly or impliedly represents that the possessor is the owner or is authorized to pass title, inducing reliance by the purchaser, the owner is estopped to deny the truth of the representation.

3. Entrusting goods to merchants: Mere delivery of possession to the merchant was not enough to estop the owner. The owner must have done more, such as standby while the merchant displays goods or expressly give authority to dispose of the article. Porter v. Wertz

UCC: mere act of entrusting is sufficient to protect the bona fide purchaser; additional acts giving the merchant apparent authority to dispose of the article are not necessary:

UCC 2-304(2),(3): Any entrusting of possessions of goods to a merchant who deals in goods if that kind gives him power to transfer all rights of the entruster to a buyer in the ordinary course of business.

Eg. O entrusts painting to A, an art dealer, for examination. A gives painting to a friend, B. B representing that he owns painting sells it to C, a BFP. If C had purchased the painting from A, C would prevail over O. But since C bought the painting from B, O prevails for three reasons: 1) B is not the merchant entrusted to O 2) B is not an art merchant 3) the sale was not in the ordinary course of B’s business because B did not deal in paintings. Porter v. Wertz

Anderson v. Gouldberg (83): P brought action to recover logs that P cut down in one section and took to another. D claims they were from another section. Issue: whether possession of property wrongfully attained, secures title such that he can retain possession against a subsequent wrongdoer who is a stranger to the property

Even though P was a trespasser, his title was good against D. Seems to contradict Dapson, where needed a license. But alternate rule would lead to “endless seizures” one thief would steal from another, etc

Russel v. Hill (86): Busbee received grant for land. McCoy receive grant for part of land that was included in Busbee’s grant. B was owner because his entry was registered before M’s. M had no knowledge of grant except the notice law implies from registration. M sold lumber from land to P who floated it down stream. D took it and sold it to a lumber company

To maintain trover, P must show title and possession; possession can give presumption of title, but this can be rebutted and it was:

B has title because he owned property and was therefore in possession. Any other ruling wouldn’t make sense: if P can recover the value of the property, the real

owner could bring trover against D and make him pay again and the fact that he paid before would be no defense.

See notes and book about UCC on p.88 codifies the common law rules about voidable title

Porter v. Wertz (88): A gives B a painting on loan to see if he wants to buy it. Later A discovers that B is a faud and he attempts to recover the painting from B. B gives painting to C a busboy from restaurant who portrays himself as an agent and sells the painting to D. Can A recover the painting from D?

Ct says no equitable estoppel because D was not a bona fide purchaser; not in the ordinary course of business. On appeal the crt says no recovery not touching the bona fide purchaser issue but saying that C was not a dealer in that kind. Seems Porter should have been estopped from getting painting at the 2nd agreement

Crt was wrong in denying use of UCC Feigen should have been treated as a BFP, but crt doesn’t treat him as one? No custom argument because no indication that market will collapse Nemo dat quod non habet: no man gives that which he has not

Chapin v. Freeland (97): D had someone build counters in premises. D mortgaged promises to DeWitt, who later foreclosed and sold premises to P. D took counters. Action for replevin for counters

Mortgage applies to fixtures… are the counters fixtures? If they aren’t then D wins because mortgage does not cover chattel. Crt says = fixtures

Fraudulent concealment: person is liable when fraudulently conceals the cause of such action. This was concealment of chattel, not action. This could have explained the transaction bt Warner and D. Fact that J. Holmes does not do anything about this part of the transaction because he is a proponent of applying the law objectively w/o moral consideration

A title that will not sustain a declaration will not sustain a plea; tries to place statute of limitations against a subsequent purchaser when the statute had already expired against the prior possessor

Statute of limitations began to run at the time of foreclosure, not mortgage; at time there is a public statement of interest antagonistic to owner. Brings out discovery rule which outlines that a cause of action begins to accrue after the time period in which the wrong could be discovered w/ reasonable diligence. Holmes: statute of lim changes the nature of things dramatically; moment at which it occurs there is a change of possession. Exceptions to Rule: Suit brought to recover chattel in one state, that is brought to another state and revival of debts (if statute has run out can still recover)

Fixtures: Chattel that is annexed to the soil or to real property—permanently attached A. Common Situations

1. Sale of houses: ie whatever is inside/ attached to house—furnaces, radiators, etc are transferred with the sale

2. Tenancy: what if a tenant makes an improvement on the property; landlord/ tenant—improvements to property

3. Inheritances: fixtures go w/ the property inherited4. Taxation: fixtures are taxed under real estate tax also5. When mortgage lenders seek foreclosure on lender’s lien on real property

including its fixtures. WyomingB. Three categories of fixtures:

1. If chattel is not physically attached to realty, not a fixture, always personalty2. Chattels attached physically so that removal can’t occur w/o material damage,

always fixture3. Chattels attached physical so that removal can’t occur w/o material damage,

always fixtures4. Chattels physically connected and can be removes w/o material damage

here it is dependent upon the intention of the annexor and the purpose of the property—does it have a direct connection to purpose of the realty?

5. How long was it there?C. Varieties of fixtures: Trade fixtures: appointments attached go back to lessee upon

expiration of lease, if it is apparent that tenant did not intend them to be a gift to the lessor

D. Laws of fixtures are default laws: take over when parties haven’t specified a contrary result

E. Mortgages and fixtures: when does chattel become part of realty that is mortgaged? Depends—mortgage can take out a specific chattel mortgage, also – issue is confusing and in part turns on when the chattel was attached, and on what the annexor’s intention was when chattel was attached to land

F. Mortgages: Two theories as to what kind of interest they convey, crts choose one theory as applicable

1. Title theory: at time of mortgage, A is giving his title to the property2. Lien theory: at time of mortgage, A is giving lien to property; not a trasfer of

title

Wyoming State Farm Loan Bd. V. Farm Credit System Capital Corp. Test: 1) whether pipe was affixed (it was sometimes); 2) intimately connected to use of

law? 3) Intention. Real issue is whether the Rumereys showed sufficient intent to make the pipe a fixture. Use standard of objective intent

THE LAW OF NEIGHBORSAdverse Possession

A. Theory of Adverse Possession: if, within the number of years specified by the statute of limitations, the owner of the land does not take legal action to a eject a possessor who claims adversely to the owner, the owner is thereafter barred from bringing action in ejectment. Once the owner is barred from suing in ejectment, the adverse possessor has title to the land. Possession of real property consists of dominion and control over the property w/ the intent to exclude others.

1. Effect of Adverse Possession: AP is a means of acquiring title to property by long uninterrupted possession; bars the owner’s claim to possession and creates a new title in the adverse possessor. Title by AP cannot be recorded because it does not arise from a recordable document, but rather by an operation of law. If adverse possessor wants to have his title recorded he must file a quiet title action against the former owner.

2. Purpose of Doctrine: Protect title; gives poor a chance to have title they normally wouldn’t have, bar stale claims, reward those who use land productively/ efficiency, keep the peace, tames wilderness/ encourages use of the land, personality (one’s personhood becomes bound by an object)

3. Burden of proof is on the adverse possessor4. Statute of Limitations begins to run when a possessor w/o right enters into

clear possession of another’s land claiming it adversely5. Tacking: the period of AP of one adverse possessor can be tacked to the

period of adverse possession of another possessor if the possessors are in privity w/ each other. Privity exist when the possession is passed from one to the other by deed, will, descent, written or oral K, oral consent or permission

6. Disabilities: If person w/ cause of action is under disability (minor, incompetence, imprisonment), at the time the cause of action accrues, most states extend time to bring cause of action beyond removal of disability. Disability must exist when the cause of action first begins

B. The Elements of Adverse Possession: Five- part test has evolved to determine whether title has been acquired by adverse possession. The theory behind the test is that the record owner does not have true cause of action against the adverse possessor if one or more of these elements are lacking. Occupants possession must be actual, continuous for the statutory period, exclusive, hostile and open and notorious

1. Actual: Actual entry on some part of the land it required. Primary purpose of entry requirement is to trigger the cause of action, which starts the statute of limitations running. If there is an actual entry on part of the land described in the deed the possessor may be deemed in constructive possession of the rest

2. Open and Notorious: The adverse possessor must occupy in an open, notorious, visible manner. His acts must be such as will constitute reasonable notice to the owner that he is claiming dominion, so that the owner can defend his rights. Generally open and notorious acts are those typical acts of an owner of property; acts from which the community observing them would think they were claiming ownership.

3. Hostile: To be an adverse possessor a person must hold adversely to the owner. Hostility does not mean animosity, but rather means only that the possession is without the owner’s consent- it is not subordinate to the owner. Purpose of requirement: help assure that the true owner is not lulled into believing an occupant will not make a claim against him.

Claim of right issues often arise between adjoining landowners where one of the parties (A) has been on open and notorious possession of a strip of land along his boundary, mistakenly believing it to be his, when it actually belongs to B.

Hostility arises from the intention of the AP to claim exclusive ownership of the property occupied. Showing of force or actual dispute is not necessary to constitute hostile entry for an AP claim. Anderson v. Cold Spring

4. Continuous: Possession must continue uninterrupted throughout the statutory period. Requires only the degree of occupancy and use that the average owner would make of the particular type of property. An adverse use is continuous when it is made without a break in the essential attitude of mind required for adverse use. The interruption must be of a kind such that if the occupant was the true owner he would have had a cause of action. A person can be in continuous possession even though there are considerable intervals during which the property is not used. Purpose: purpose of requirement is to give the owner notice that the

possessor is claiming ownership and that the entries are not just a series of trespasses

Seasonal Use: use of a summer home only during the summer for the statutory period is continuous use.

Abandonment: abandonment is the intentional relinquishment of possession. If the possessor abandons the property for any period of time, without intent to return, continuity is lost.

Interruption by true owner: if the true owner reenters the property openly and notoriously for the purpose of regaining possession, and interruption has occurred. Interruption of possession by the true owner stops the statute of limitations from running.

In several states, principally the west, AP must pay taxes to prevail5. Exclusive: The adverse possessor must be in exclusive control of the

property; must not share control of the property w/ the true owner and the

property must not be available to the public generally. However, it is possible for two (neither of them the record owner) to be in joint possession of property in which case they would eventually gain joint title to the property by AP.

C. Constructive Adverse Possession: applies only when the adverse possessor enters under color of title.

1. Color of title: a writing which the adverse possessor may believe conveys good title but really is defective and thus cannot operate as a conveyance

2. Actual possession of portion of land is extended to include the remaining land. Must be actual possession of at least part of the land

D. Adverse possessor’s title does not affect the interest of any person unless that person had a cause of action against him. A prior possessor even though has no absolute title can still maintain an action of ejectment

Fleming v. Griswold (130): Tallman acquires valid title of premises. E. Griswold held premises adversely to Tallman under a warranty deed. Tallmans’s daughter (P) gets married. E. Griswold (still in possession), conveyed premises to D. Tallman dies.

Lower crt: D is entitled to verdict having shown adverse possession for over 25 years, notwithstanding P’s disability be reason of pregnancy and marriage.

Disability of unmarried women: could own property but couldn’t bring suit w/o husband. Crt affirms that where the statue has begun to run, it continues to run notwithstanding any

disability. Statute didn’t start to run in 1911 because of doctrine of tacking

Anderson v. Cold Spring Tungsten Inc (132): P (Cold Spring) holds record title to property. D bought cabin located on property and made improvements on it and his family made use of it during the summer. When they were not there they locked and shuttered the windows. They used the property around cabin as well. Issues: 1) Whether D’s entry was hostile and 2) whether D’s continued use amounts to AP

D’s hostile intent can be deduced from the facts; he thought cabin + surrounding property was his; he locked it up, asked people to leave, etc. Paying taxes is not important for AP unless statute says so; paying taxes is not public

Continuous because it was a summer home and he did what a real owner would do Crt said it was open and notorious, but no constructive AP no fences or boundaries; D

can only claim land he has occupiedDillaha v. Temple (136): P bought farm along river and river moved creating accretions to P and D’s property. D did not love there. P’s property exclusively controlled by his family

Accretion: property owners lose rights of land that they had because of the gradual change

No AP because P recognized D’s interest in the disputed property; not hostile intent; possession must be inconsistent w/ the true owners rights and w/o owner’s consent

Advise to urban squatters: act like it’s yoursMeyer v. Law (139): P owned property next to D. D had a survey performed (it was wrong and not recorded) and built a fence according to it. Both parties had deeds reflecting the property and both had paid taxes on it. D though the fence was on the turn line and P didn’t take legal action to prove the contrary.

Fl Statute of AP v. Statue of lim: Fl statue describes elements of AP rather than merely laing out statue of lim; putting the bar higher if want AP have to meet criteria v. having so many yrs to bring suit similar yet different

Majority: 2 ways to AP: 1) open, continuous.. + pay taxes or 2) color of title: deed/ instrument (survey is not an instrument; does not convey the land, also not recorded). Dissent: enclosure amounts to color of title so don’t have to pay taxes

Statute provides avenues for AP: w/ and w/o color of title: entry under a deed that gives more than you actually own. Some crts add hostility to color of title, means hostilte under claim of right

Majority makes policy argument, which theory seems to fit.

Rights of Lateral and Subjacent Support: the right to support of one’s land adjoining is one of the incidents of ownership. It is sometimes called a “natural right.” There are two kinds of support involved. “Lateral support” is support land receives from the adjacent land; right of a landowner to have his land supported laterally was absolute. “Subjacent support” is support that land receives from underlying strata.

A. Lateral Support1. Right to Support of land: land in its natural condition is entitled to be held in

place from the sides by the neighboring land. A landowner is strictly liable if she changes her land use so as to w/draw lateral support from her neighbor and cause her neighbor’s land to slip and fall in. It is no defense that the excavator acted with the utmost care and not negligently. The absolute right to support of land is based on the idea that fairness requires that adjacent landowners not disturb the natural conditions so as to deprive the other’s land of lateral support. This right does not include the right to have the additional weight of buildings or artificial structures on the land supported laterally

Retaining walls: if an excavator builds a retaining wall to support the adjoining parcel, she and her successors in interest have the duty thereafter to maintain the wall. Although a landowner is not liable for failure of support because of an act of God (erosion, storm, flood) decay or deterioration of a retaining wall is not an act of God so as to relieve the excavator from liability. Once a landowner changes the natural conditions and erects an artificial support, she and all subsequent owners of the changed property have a duty to maintain such support. Noone v. Price

Right to support of buildings on land: a. Majority view: Strict liability for w/drawal of lateral support to

a neighbor’s property does not extend to buildings on the neighbor’s land. Where an adjacent landowner excavates and provides sufficient support to sustain the weight of the neighborhood land in its natural state, but the neighboring land slips because of the weight of the buildings on it, the excavator is not liable in absence of negligence. On the other hand, if land would have slipped even in its natural state (ie without the buildings) because of the excavation, the neighbor who

w/draws support to the land, because of the excavation, resulting in damage to the building, is strictly liable for damage to the land and the building. The crucial fact is whether the weight of the building placed so much pressure on the land that the building caused subsidence when the neighbor w/ drew support. If it did the neighbor is liable only for negligence. Noone v. Price

b. Minority view: In a minority of states, an adjacent landowner has the same strict liability for failing to support neighboring buildings as he has w/ respect to the land. It is likely that this view is the law in large cities. Policy: Protecting through strict liability the person who builds first encourages development

c. Exception to Rule: When excavation one’s land is caused by extraordinary forces of nature (eg severe storm) the owner of that land is under no duty to refurnish the lateral support that was removed by nature

d. Statute: p 150: Damages: 1) wrongdoer is liable for damages to property or business 2) each adjacent owner (common law used to allow recovery for a neighbor)

e. Would AP be entitled to damages for lack of support? Allowing recovery would create a potential for double damages; both record owner and AP could sue. Relation back doctrine: once AP has run, then the AP is considered t o have possessed all the way back to point at which statute began to run

2. Subjacent Support: Whenever mineral estates are severed from the surface, the surface occupant has a right to subjacent support against the mineral owner. This right differs from the right to lateral support in that 1) the mineral owner must support the land with the buildings existing in it when the mineral estate is severed (ie the mineral owner is strictly liable for subsidence of the land and any existing buildings) and 2) the mineral owner is liable for negligently damaging springs and wells, but under the usual rule that an adjacent owner has absolute ownership of the percolating water under his land, the adjacent owner is not liable for interfering w/ percolating ground water of his neighbors.

3. Damages: If land is in natural condition injury to the land If artificial structures on land a) damage to land + damage to structure (English); b) land in its natural condition and may not include damage to structure (American). Either way, if wrongdoer is negligent, liable for all damages. At common law excavator had right to go onto neighbor’s land and shore up land to prevent injury; this was a voluntary action so excavator bore cost. If excavation is done and subsidence doesn’t occur until later, the cause of action accrues when the subsidence occurs and causes damage rather than when the excavation is made.

4. Modifying Duty of Support by Statute

Noone v. Price (144): P bought a house and the wall under the front porch was giving way. The wall was entirely on the D’s property and was messed before she bought the property. P complained to D, but she did nothing to repair the wall. P has to repair the house and sued D for failure to provide lateral support. D claimed P was negligent in failing to take precautions to protect their and were estopped from suing her because the wall was put up by the previous owner

Rule: there is a duty of lateral support to the land, but not the structure of the land This case relies in the question of strict liability. D’s wall was built before P built their

house and all the parties were aware of the condition of the wall. D did nothing but not repair it. Therefore on order for P to recover they must prove that the disrepair of the wall would have led to damage of their land in its natural condition. But if it was cause by the weight of P’s house, P cannot recover.

Island Creek Coal Co. v. Rodgers (151): P built a home, knowing it was situated over an underground mine and there was a problem w/ subsidence and received 50k in damages for injuries as a result. D appeals.

When D left there was nothing but rural farmland. The underground miner owner must only leave land in its natural state. This means he is only liable to provide support for the land as it exists when he abandons the mine.

If there are separate strata the underlying strata owner must give support to the owner of the overlying strata

Lateral v. Subjacent: similar in that both begin w/ SL and move towards negligence, but difference in circumstances: Difference is that surface owner has a right to support not only of unimproved land, but all of the structures existing at the time when the severance took place. ?????

Air and Light:A. Airspace: Cejus est solum ejust est usque ad oelum ad inferos: To whosoever the soil

belongs, he owns also to the sky and to the depths. The surface owner may be protected against intrusions in the overlying airspace that impair his present or potential use of the surface. He may be able to recover in trespass or where there are repeated intrusions, in nuisance

1. Navigational Servitude: ancient maxim says that the surface owner has a right to exclusive possession to the heaves. But, modern world doesn’t follow this. Aircrafts have the right to cross airspace. The distance above the surface is set by the government. Test of owner’s rights is whether use of airspace harms the surface owner. If it does not harm the surface owner, intrusions in airspace by aircraft are not actionable

2. Noisy flights as inverse condemnation: if the noise of airplanes flying over land constitutes and direct and continuing interference with the enjoyment and use of the surface, a governmental body may have taken property for which compensation must be paid under the Constitution.

Eg. Low flying military aircraft frightened chickens, which interfered with P business. Federal gov has taken with inverse condemnation (an action bought by an owner against a governmental body having the power of eminent domain), an easement for noisy

flights over the farmer’s land and must pay damages. United States v. Causby

3. Easements

Murphy v. Bolger (157): Part of D’s roof projects over P’s land. Issue: Was the projection an ouster (wrongful possession or exclusion) of P’s possession of land or a mere intrusion

Rule: land is P’s to the sky and has a right to it. P was wrongfully deprived of his land and D was in wrongful possession via his

roof. Remedy: removal of projectionUnited States v. Causby (159): P owns house and raises chickens. Path of glide for planes is over their house (war time). Result was the destruction of their chicken business. Issue: whether P’s property was taken in the meaning of the 5th Amm (requires fed gov to pay compensation when it has “taken” private property) by frequent flights over P’s property at low altitudes.

Even though US has “complete and exclusive national sovereignty in the air space” crt says that maim has no place in modern world and the of the flights rendered the property uninhabitable, there is a taking under 5th Amm

If a landowner is to have full enjoyment of land, must have control over immediate reaches of the enveloping atmosphere

Gov has taken an easement. Easement v. nuisance: nuisance is done on your land that affects neighbor, neighbor can get damages, easement is right to use someone else’s land w/o disturbing their ownership. Gov had to frame it this ways so they won’t get sued; Gov has Sovereign Immunity; can only be sued on grounds that consent to be sued and said can’t be sued for express/ implied K, so claim its an easment

Dissent: Meaning of constitution was given too broad of a meaning; there was no taking

B. Rights and Air and Light: whether a landowner has a cause of action in nuisance for her neighborhood’s blocking of sunlight is a question on which there is, to date a split decision. English Common Law (doctrine of ancient lights): one could acquire and easement by prescription for access to sunlight across the land of a neighbor if period of use was uninterrupted an unobstructed for 20 yrs (like AP); this was rejected in US probably because it was considered hostile to economic development, records won’t reflect uses of air; not same kind of ability to provide notice like w/ AP; landowners can’t effectively prevent adverse use of air/light; air and light are deemed a natural right

1. Has been held that such a cause of action does not lie. Neighboring hotel blocking sun on swimming pool. Fountainbleau Hotel v. Forty-five

2. It has also been held that a cause of action in nuisance does lie for blocking sunlight. Blocking neighbor’s solar collector. Prah v. Maretti. If such a cause of action does lie, it is probable that the crt in balancing the utility of the conduct against the harm, will give more protection to solar collectors than to sunlight for gardens or swimming pools.

3. The economic issue, discussed earlier in the other contexts is whether it is more efficient to have a fixed definition of solar rights, which can be easily transferred to the higher valued use if there are low transaction costs, or reasonableness test.

Sundower, Inc v. King (167): P sold a motel to D. P then built another motel right next to it. D builds a large fence/ sign which restricts light and air into the room. It had no advertising value and cost $6,300

One way not erect a structure for the sole purpose of annoying one’s neighbor; no property owner has the right to erect and maintain an otherwise unless structure for the sole purpose of injuring his neighbor. Spite fence that serves no useful purpose may give rise to an action for both injunctive relief and damages.

Fountainebleau Hotel Corp. V. Forty-Five Twenty-Five, Inc (171): P owns hotel which adjoins Fount. Hotel (D). Both are luxury hotels. Addition to D’s hotel is being constructed 20 ft from the property line and in such a way that the shadow from the addition extends over the swimming pool and sunbathing areas of P’s hotel. P wants toe enjoin D from proceeding w/ construction

Rule is that one must not use his property so as to not injure the rights of others Crt: absent contractual obligation, law does not say that a landowner has a legal right to

free flow of light and air across the adjoining land of his neighbor. Since there is no right and the structure serves a beneficial purpose no claim

Different from Sundower; there is an economic benefit to addition Even though D may have violated the statutory distance, Crt: if they moved back to the

correct boundary it wouldn’t make a difference, had a permit and already spent a lot of $ (estoppel argument)

Prah v. Maretti (176): P’s house has a solar system which included collectors on the roof to supply energy for heat and hot water. Despite P’s request, D started to build house in a way that would restrict P’ solar power. Does P have a claim under private nuisance?

Private nuisance doctrine has traditionally been employed in this state to balance the rights of landowners and is applicable in this case

Owner does not have an absolute right to use land in a way that injures others. Crt has been reluctant to providing protection for a landowner’s access to sunlight for

policy reasons (right if landowner to use property as wishes, do not want to impede land development) but these policies are obsolete. Now access has a new significance (light is a source of energy) and need for rapid development is not as great

Arguably a case of judges acting as legislature. If Prah’s lawyer, tell him to get an easement Dissent: analogy to spite fence is wrong (no malice); policies are still legit

Nuisance: an unprivileged interference with a person’s use and enjoyment of his land. About weighting responsibility of conduct of neighbors v. harm done. Also about reasonableness/ ordinary taste. Relief from nuisance was awarded at common law under the basic maxim that one must use his property so as not to injure that of another. A nuisance is termed a “private nuisance” when it involves interference with the private use and enjoyment of one or a number

of nearby properties. It is a “public nuisance” when interference is with a right common to the general public.

A. Ingredients of reasonable: 1) utility 2) suitability 3) context 4) compliance w/ laws 5) conduct 6) malice

B. Private nuisance is conduct that causes a substantial interference with the private use of land and is either 1) intentional and unreasonable or 2) unintentional but negligent, reckless, or resulting from an abnormally dangerous activity (for which there is strict liability). A person cannot sue claiming a private nuisance unless she has a property interest that is affected or alleges bodily harm as the result of the activities complained of. P must establish 1) interference w/ P’s use and enjoyment of land must be substantial and unreasonable; 2) D’s conduct either a) intentional and unreasonable or b) negligent or reckless; 3) D’s conduct must cause the interference

6. Intentional nuisance: the usual type of nuisance is an intentional and unreasonable act that continues over time and is known to interfere with another’s enjoyment of the land. Primary factor in determining an intentional nuisance is the unreasonableness of the interference w/ neighbor’s use and enjoyment

7. Types of unreasonable interference (must offend average person w/ ordinary sensibilities):

Depreciation of property value: use of property value in a manner that depreciates the value of the surrounding property is not enough by itself to constitute nuisance, but can be important in proving a substantial injury to the plaintiff

Can’t claim nuisance if know about the nuisance when enter the property

Discomfort: serious discomfort and inconvenience in the use of land; objectionable noise, odors, or smoke are frequently interferences complained of.

a. Spite fences: a spite fence erected solely to harm the neighbor and of no economic benefit to the erecting party, can be enjoined as a nuisance. Such conduct has no social utility.

Character of the neighborhood: the character of the neighborhood is of great importance in determining a nuisance. A business may be a nuisance while the same business conducted in the same manner in another are may not be a nuisance. Residential areas are often given a preferred status and are protected against incompatible uses.

a. Zoning ordinances: a zoning ordinance is admissible in court to show community policy with respect to desirable land use within a neighborhood. However, fact that D’s use of land is consistent with local zoning is not controlling in an action for private nuisance. Even though the ordinance may permit the use generally, the specific activity may be carried out in a manner as to constitute unreasonable interference with the adjoining parties. Boomer v. Atlantic Cement

Note: At common law every landowner had exclusive possession of the surface of his land and the right to use such surface as he pleases,

but modern jurisdictions usually hold that conduct motivated solely by malice to be actionable, even if it is just aesthetic.

B. Public Nuisance: affects the general public, where as a private nuisance affects only particular individuals. Public nuisance focuses on harm to society at large

C. Nuisance v. Trespass: 1. Law of trespass protects a property owner’s right to exclusive possession, and

thus requires some intrusion onto the property. Damages do not need to be proved, because the owner’s right of exclusive possession is absolute.

2. Conversely, the law of nuisance protects the property owner’s right to use and enjoyment of the property, which can be infringed even w/out a physical intrusion. This right is absolute, and thus the plaintiff must prove actual damages.

D. Remedies: action for damages; suit in equity for an injunction; self help

Bove v. Donner-Hanna Coke Corp. (185): D operates a coke oven that causes a lot of dirt and soot to to accumulate in P’s house (she was there first). P claims it effects her house and ha decreased the rental value of her property

Rule: One may not use his own property to the injury of any legal right to another When have conflicting rights, must have a general rule: Times are changing (more

commerce) and D has no control. Crt cannot condemn as nuisance a business which is conducted in an approved manner and cannot unless bad faith is involved

Griffin v. Northridge (190): After P moved in D obstructed view by building eucalyptus trees that obstructed their air and light (roots grew under property too), built a ugly wall as was discouraged a potential buyer.

Trees blocked light and air but it’s not actionable because trees are not an easement; anti-nature to say they are

D’s acts created a nuisance (akin to smoke or oil) evidenced by fact that the acts were intended to harass and annoy P continuously and to interfere w/ the comfortable enjoyment of their home

Difficult to to decide what is nuisance; economic loss is evidence but also need to show unreasonableness

LAND CONVEYANCINGContracts of Sale

A. Broker’s Role: Almost all houses and real property are sole through a broker. Seller signs a contract with the broker giving the broker the right to list and show the property to prospective buyers and of the property sells, to collect a commission.

1. When commission is earned: Traditional rule is that broker gets commission is she produces a customer ready, able and willing to buy on the terms and for the price set by the seller in the brokerage contract. Once the buyer is accepted by the seller, the seller owes the broker commission. This means that if the seller enters into a contract with a buyer and the sell falls through because of the buyer’s default, the broker gets a commission. This rule does not carry out the expectation of the sellers, who ordinarily expect that the broker will take the commission out of the sale proceeds.

2. In recent years, crts have discarded the traditional rule and have held that the broker earns a commission only when the buyer completes the transaction by paying the purchase price. If the sale falls through because of the buyer’s fault, the seller is not liable to the broker, but if it is the seller’s fault the seller is liable. Tristam’s Landing, Inc v. Wait

Tristam’s Landing v. Wait (490): D agreed that P could act as real estate broker. No talk of commission. D knew that normal brokerage fee was 5% of purchase price. Found a buyer (who gave down payment) and offer was orally accepted, but didn’t appear at closing. D kept check, but wouldn’t pay P commission

Broker does not get commission. Common Law Rule: Broker gets commission if produces a customer ready, willing and able to buy on the terms and price set by owner. Able refers to financial ability, willing/ able is more ambiguous Tristam’s Rule: deal has to go through

Crt places burden on broker because owner usually pays commission out of proceeds from sale. Could say this protects people against unscrupulous real estate agents who just want $. This could lead to bad reputation, so wouldn’t do it. Also could say that brokers are supposed to find people, not complete the deal. Seems unfair that seller could have recourse against buyer and agent could end up w/ nothing

Could say Tristam changes the law by expanding language of the rule and making final sale a requirement OR say it just creates an exception

Hard to determine what right rule should be; is it better to have a definite test for simplicity sake? Hard to do because “fault” plays a role and it is hard to pinpoint

B. Written Contract/ Statute of Frauds: Once the buyer and seller have come to an agreement, the Statute of Frauds requires that the contract for sale of land be in writing, signed by the party to be charged thereby. Otherwise the contract is not enforceable. This means in general both the buyer and seller must sign the contract of sale.

1. Writing can be formal contract or memo; must show a meeting of the minds sufficient to constitute a contract.

a. Negotiations: if the parties are negotiating with the understanding that the terms of the contract are not fully agreed upon and a formal written agreement is contemplated, a binding contract does no exist until the formal contract is executed

2. Essential terms: The writing must contain all the essential terms: identification of the parties, description of the property and the terms and conditions. Cash v. Maddox

a. If a price has been agreed upon it has to be stated, if not the crt will imply a reasonable price

b. Contract Contingencies: a contract of sale for land is rarely completely performed at the moment of execution; instead usually had contingency clauses that require the parties to perform a variety of extra tasks

Financing: Many contracts contain a subject to financing clause providing that the offer to purchase is contingent on the purchaser obtaining the necessary financing. The buyer must act in good faith and use reasonable diligence in procuring a loan. Bruyere v. Jade Realty Corp

Building permit: A contract may be conditioned on the buyer obtaining the necessary permits for erecting a building or obtaining a zoning change. The buyer must use reasonable efforts

c. Disclosures about the Property: If vendor and real estate agent know about a material defect in the property, they have a common law duty in most states to disclose the defect to the purchaser of is it not known by the purchaser and is not reasonably discoverable. Failure to disclose could constitute tort of fraudulent concealment. Regime of caveat emptor is dead

3. Exception to Statute of Frauds: Doctrine of Part Performance: Equitable

doctrine that allows a crt of equity to specifically enforce an oral contract for the sale of land

a. Paying consideration for the land and taking possession of it or improving it, are actions that constitute an adequate substitute for a writing

b. Although all crt require some consideration payment, payment alone is not enough to satisfy the doctrine; most crts require possession and some require that the buyer improve the land. This would make the contract enforceable, because the crt assumes that the buyer wouldn’t do all of this w/o a contract

Cash v. Maddox (499): D discussed selling land to P oral agreement on the phone. Only written evidence of K is a check mailed by P for $200 as part payment. D decided not to sell and returned check. On check written: 15 acres in Pickens, S.C. land binder, 30 days from date o check”

Under statute of frauds before a crt will decree specific performance of a K for sale of land, writing must contain definite, certain and clear terms. The intention of parties must be understood w/o oral evidence

Crt: K does not satisfy statute because land sold was not described or designated so that crt could render a decree for its conveyance. Words did not adequately identify parties. If no statute, P would have had a stronger case

15 acres was ambiguous because D owned 76 and didn’t know which part of the 76 was in agreement; if sale had been for 76, then would not have been ambiguous. What if price was “no less than $200”? Case law says this is ok and satisfies statute

Part performance will take a K out of statue because if K is partly performed, enough evidence to know K terms

Dissent: (not in book): look at parol evidence to figure out intent. Question arises how far outside K do you go?

Decision may be seen as extreme; that K was rebuked on technicality; crt usually does not stretch to strike down Ks. Could argue that Statue was met because it’s a written memorandum that shows a K. Don’t want Statute to be seen as a tool: you didn’t meet statute so breach

C. Implied Contract Terms: Contract of sale often include two implied terms:1. Implied Warranty of Habitability: even though not expressly included on K,

state and case law implies it. Applies to all matter affecting the habitability of the premises.

2. Implied Covenant of Marketable Title: Unless there is a provision in the contract, it is implied that the seller must furnish the buyer with good and marketable title at the time of closing. Marketable title means title that is reasonably free of encumbrances and other title defects, and free of the risk of litigation.

a. Good Record Title: A seller can show marketable title by producing a good record title Good record title means that there are on record transfers of title form the original grantee to the seller. A person who has good title has an unencumbered fee simple, provable from the public record or in many states can show title through adverse possession. But if claim title through adverse possession keep documentation because a good argument can be made that a gap in the chain of title caused by adverse possession should be deemed to render the title unmarketable. Trimboli v. Kinkel

b. Defects in Title: Titles become unmarketable in three ways: Vendor had title but lost it in an action or proceeding. Eg

lost title after a third party adversely possessed Vendor never acquired title because a flaw in the chain of

title. Eg deed was forged or undelivered, if chain depended in judicial proceeding and crt did not have jurisdiction

c. Encumbrances: marketable title means an unencumbered fee simple. Mortgages, lines, covenants, and easements make title unmarketable unless the buyer waives them. However, a mortgage is not an encumbrance if the seller pays it off before closing. Zoning laws and subdivision restrictions are not considered encumbrances. But if zoning restrictions are imposed after the buyer signed the contract and these restrictions would materially interfere with the buyer’s contemplated use of the property, many crt would not enforce the contract.

Trimboli v. Kinkel (516): P hired D, an attorney to search title of land. D said that title was good even though it wasn’t; one of the transactions was for exchange rather that for $. P bought it and tried to sell it later, but the purchaser rejected it because of flaw in reocord. D represented P at trial ant they lost. At trial D didn’t mention adverse possession as a solution.

Deed was plainly invalid and D should have known: rule: it is negligence to fail to supply the settled rules of law that should be known to all conveyancers

P supplied no evidence of AP as a defense

D. Express Title Standards: To avoid problems, a purchaser should not rely on the implied covenant of marketable title and provide in the K that the vendor must present a marketable title of record.

1. Insurable Title: As an alternative to marketable title standard, some K’s for sale provide that the seller must tender insurable title to the purchaser. Insurable title is generally equal o marketable title, but a title insurance company will insure over an encumbrance for an extra premium, making the title insurable. Insurable title standard can be dangerous for the purchaser because it takes the decision whether to accept title away from the purchaser and gives it to the insurance company. Thus, if purchaser agrees to accept insurable title, he often stipulates the terms in the K

E. Time for Performance of Contract: Even though the contract sets a specific date for performance (closing date: date on which title will be transferred to owner), contract is enforceable in equity after that date of performance is offered w/in a reasonable period thereafter. Unless have a time is of the essence clause, crts will read inan extension of time of performance

1. Time of the Essence Provisions: Because the rule in equity can leave the liabilities of the parties uncertain for a substantial period of time, well-drafted contracts specify that time is of the essence. If this clause is in the contract and one party does not perform by the specified date, the other party is excused form performance. In other words timely performance becomes a condition rather than a mere covenant.

F. Doctrine of Equitable Conversion: Applies as soon as the seller and buyer execute a contract of sale. Invoked to solve problems that result from the two step method of conveyancing: first there is a contract of sale and second, weeks later, the closing. During this period, various problems may arise that turn on who has title to the real property. Doctrine was invented to treat the buyer as having title for certain purposes prior to the date set for closing

1. Doctrine creates an equitable interest in the property in the buyer. In contrast, the seller is treated as merely holding title to the land in trust for the buyer

2. Two Primary functions: Settles probate and intestate disputes when one of the parties to

the K dies during the executory period Transfers risk of loss to the property to the buyer. In a

minority of states the risk of loss stays w/ the seller. They imply a condition in the K that 1) if the loss is substantial and 2) the terms of the agreement show that the building constituted an important part of the subject matter of the K, K is not binding. If building is destroyed, the buyer can rescind and recover any earnest $. Bryant v Willison Real Estate Co.

3. Hypos:

a. Seller dies and leaves will: Land X, Chattel Y. Proceeds of sale go to Y

b. X Y, gov takes by imminent domain. Y gets award.4. Doctrine of Equitable Conversion v. Subject to financing clauses: If put in a

subject to financing clause, and house burns, what happens? Under equitable conversion has to a valid, specifically enforceable K in equity. Is a K specifically enforceable if it is subject to financing? Only if financing is a condition precedent. Condition precedent v. subsequent: formal difference but important w/ this doctrine

Bryant v. Willison Real Estate (502): P entered a K to buy a building and gave D a down payment when K was signed. Balance was to be paid when deed was delivered, but before that happened, a water line broke and building flooded. P asked D to repair damage or K was void. D refused and sold the building for someone else for less. P brought action for rescission of K (unmaking of K; out parties to where were before K was made) and return the down payment

Doctrine of Equitable conversion: where sale of real property does not contain a provision allocating the risk of loss and property is damaged, it is not the fault of the vendor; loss is on the puchaser, but if K allocates to vendor, does not apply.

“As is” means that purchaser must take premises in the contract at present condition as of the date of the K, therefore vendor bore risk. Where risk of loss is on the vendor and damage is not substantial, purchaser is entitled to sue for specific performance and the price dropped by amount of damage. But of substantial damage, K is terminated and down payment is returned

Role if insurance is important, but it’s not in the case. Could say insurer should bear the loss. Rule: seller holds proceeds for insurance policy as a constructive trust for the buyer; $ stands for house?????

Bruyere v. Jade Realty Corp. (511): P deposited $1000 in accordance w/ purchase agreement (subject to financing 7% for 30 yrs). P got financing from bank. P got divorced. P(w) wanted to get house but bank w/drew financing and deal feel threw. P wants deposit.

Is subject to financing clause a condition precedent or subsequent? No fault rule in divorce; is this punishing her for getting a divorce?

G. Quantity or Acreage Disputes Turner v. Ferrin (519): District crt found that sale of property w/ 6 % acreage

variation was not a substantial enough to warrant P’s rescission. P appealed. Issues: whether D was entitled to rescission and if there was a forfeiture when D could not provide title.

Crt said this was a sale in grossH. Breaks in Chain of Title: In most jurisdictions marketable title stnd does not require

that the title be provable based solely on the public property records (eg AP is marketable even though did not quiet title). Arguably, the gap made in title from AP should render the title unmarketable. After all, judge may not agree w/ the vendor’s interpretation of the facts. But of purchaser proceeds w/ the sale he should get

affidavits that document the facts on which the vendor bases his claim of AP and keep track of the AP. Trimboli v. Kinkel

I. Contract Remedies: Neither party can place the other in default unless he himself tenders his own performance and demands that the other party perform. Thus to place the seller in default, he buyer must on closing day, tender payment and demand title from the seller. Unless there is a time is of the essence provision, the seller has reasonable period of time thereafter within which to perform. If one party breaches the remedies are:

1. Rescission: Buyer: If seller breaches, the buyer may rescind the K and

recover his down payment. If buyer before closing tells seller that the title is defective and rescinds the K , the buyer is in breach and the seller is entitled to an attempt to make the title good.

Seller: On breach by the buyer, seller can rescind the contract2. Specific Performance:

Buyer: Land is considered unique, making $ damages inadequate. Therefore the buyer has a right to specific performance if the seller breaches. Specific performance is an equitable remedy and therefore the seller is allowed equitable defenses (eg undue hardship).

Seller: A seller, like a buyer, is entitled to demand specific performance on the party’s breach of contract. If there is a defect in the seller’s title that is insubstantial and not material, the seller can enforce the contract specifically with an abatement in the purchase price to compensate the buyer for the deficiency.

3. Damages: Buyer: If the buyer chooses, the buyer can sue the seller at law

for $ damages rather than specific performance. In most states, buyer seeking damages is entitled to the difference between the contract price and the market value of the land on the date performance is due. Where the seller is acting in bad faith, the buyer is entitled only to be restored to her original position

Seller: If the seller prefers to keep the land, seller can do so and still sue the buyer for $ damages

Turner v. Ferrin (519): K for sale of land, but there was a 6% variation in the acreage. P wants to rescind K.

Property was for sale in gross because said more or less 90 acres and price was in a lump sum rather than for specified rate per acreage; generally for sale in gross, variation in acreage is not grounds for rescission or relief.

Was it substantial ie did 1) was consent obtained through fraud or 2) was there failure o consideration? Crt said neither is true, so cannot rescind.

Doctrine of Merger by Deed: if have K then the terms of the K are read into the deed. This was not directly raised by case but is implicated. Saying that seller’s contractual

obligations are discharged after the closing and seller’s obligations are measured strictly under the K??? Also seen in Anderson

Trimboli v. Kinkel (616): P sue lawyer for not finding defect in title. The title was judged unmarketable then the lawyer realized could make AP claim. Also issue of damages

AP was not strong argument because it was a co-tenancy and since each tenant has the right to possesses the whole, need definite hostility; can’t just continue to live

LAND TRANSFERSModern Conveyancing: A deed is normally used to convey title to real property and a bill of sale is used to convey title to personal property. A deed can be used to convey any interest in land, whether the fee simple absolute title or a more limited interest. Each time an interest in land is conveyed a new deed is prepared. Most commonly used deed forms are the general warranty deed, the special warranty deed (aka limited warranty deed) and the quitclaim deed. Whichever type of deed, must be in writing in order to satisfy the Statute of Frauds

A. Deed v. Will: 1. Will takes effect at time of death; deed takes at present2. Will always a gratuity; no consideration for a will. Normally there is

consideration for a deed but there doesn’t have to be3. Will must be probated in order to be effective. Deed is effective bt parties

even of not recorded; to be fully effective it needs to be recorded, nut it doesn’t have to be recorded to be effective

4. Subject to different laws and jurisdictions: Will church; Deeds common law. Still have probate crts that have jurisdiction over wills

5. At common law livery of seisin required for deeds, but not wills6. Statutory formations: Wills done w/ statue of formalities; Conveyances

Statute of Frauds, which does not require the same level of formalityB. General Warranty Deed: Warrants title against defects arising before as well as

during the time the grantor had title. Normally contains all six of the following title covenants:

1. Covenants of Seisin: grantor covenants that he owns the estate or interest that he purports to convey

2. Covenant of Right to Convey: grantor covenants that he has the power to make the conveyance. Satisfied if the grantor has title and is under no disability, or if he is acting as trustee or agent of the owner.

3. Covenant against Encumbrances: grantor covenants that there are no easements, covenants, mortgages, liens, or other encumbrances on the property.

4. Covenants of Quiet Enjoyment: grantor covenants that the grantee will not be disturbed in possession or enjoyment of the property by a third party’s lawful assertion of superior title.

5. Covenants of Warranty: grantor covenants that he will defend on behalf of the grantee any lawful claims existing as the date of coveyance, and will compensate the grantee for any loss sustained by the assertion of superior title. For all practical purposes, this and the covenant of quiet enjoyment are the same

6. Covenant of Further Assurances: grantor covenants to perform whatever acts are reasonably necessary to perfect the purchaser’s title, if it turns out to be imperfect. This covenant is not really used in the US and is often omitted from deeds.

C. Special Warranty Deed: Special warranty deed also normally contains all of the 6 covenants, however, the warranties cover only defects arising during the grantor’s tenure, and not defects arising prior to that time. Thus, grantor guarantees only that he has done nothing to make the title defective. Limited Warranty Deed?

D. Quitclaim Deed: Quitclaim deed warrants nothing. Grantor merely transfers whatever right, title, or interest he has, if any. Useful in clearing an apparent defect in title, where grantor is not pursuing the claim.

E. Statutory Warranty Deeds: To reduce complexity and length if deeds, many states provide for so-called statutory short form deeds. In many cases specific words of coveyance are deemed to include certain enumerated covenants. For eg, words grant, bargain, convey or sell often, by statue presumptively connote general warranties of title

Anderson v. Anderson (542): Jewell Anderson executed her will devising property to son (P), but later executed a deed to granddaughter, Altha, for consideration for providing adequate care of [Jewell] during the remainder of Jewell’s lifetime. Altha deeded the property, for no consideration to William

Crt said promise of support set out as consideration for deed created a covenant, not a condition subsequent. Even though seems like a condition, where language is ambivalent, treat as a covenant rather than a condition. Crt wants to aviod forfeiture (all or nothing) so say it’s a covenant

Altha had no intention of keeping her promise and thus, there was a total failure of consideration for the conveyance. Also committed fraud.

Seems to contradict merger of by deed; promise should disappear ???? Fraud: she never intended to perform P showed that has a valid interest in property which entitles him to maintain his suit to

cancel deed from Jewell to Altha

Deed Covenants: A. Breach of Covenants:

1. Present Covenants: Covenants of seisin, of right to convey and against encumbrances. Present covenants means that they are breached when made, if at all. For eg, at the time a covenant of seisin is made, either the grantor has or does not have title. If he has title the covenant is not and can never be breached. If he does not have title the covenant is breached when made. Similarly at the time of covenant against encumbrances is made, either an encumbrance exists (in which case the covenant is broken), or it does not exist (in which case the covenant can never be broken).

What constitutes breach: The covenant of seisin is breached if the grantor does not own the interest he purports to convey. The covenant against encumbrances is breached if there is an encumbrance on the property at the time the covenant is made. No

eviction or disturbance of the grantee’s possession is required to establish a breach.

When breach occurs: If there is breach it occurs at the time of the conveyance. The grantee has an immediate cause of action, and the statute of limitations begins to run immediately

Brown v. Lober (554): P bought land from X and received a general statutory form warranty deed and P took possession of the land and recorded the deed. P granted Y a coal option for the coal rights. Later P discovered that only had 1/3 interest in subsurface coal rights; prior grantor had reserved 2/3 interest in mineral rights of property. P had to get less $ from Y P had done a title search and thought were the sole owners. P brought action for damages against X’s executor (D)

Since was a general statutory form warranty deed certain covenants are implied: covenant of seisin/ covenant of right to convey; covenant against all encumbrances; covenant of quiet enjoyment.

Covenant of seisin is a present covenant and if broken at all is broken at the time of the delvery of the deed. This covenant was definitely breached when X delivered the deed and P had a cause of action then but now he is barred by the statute of limitations

Guaranteed possession and enjoyment, not perfect title. P possessed surface area but did not possess the minerals because they did not undertake to remove them; no one prevented them from doing so no constructive eviction or breach of covenant of quiet enjoyment

Hard result; tell client to find 2/3 owners. Title insurance wouldn’t have really helped; may have ensured a better title search

2. Future Covenants: Covenants o quiet enjoyment, warranty, and further assurances. Means the covenants is not breached until the grantee is actually or constructively evicted sometime in the future.

What constitute breach: A covenant of quiet enjoyment or warranty is breached only when the covenantee is evicted or disturbed in possession. The mere existence of a superior title does not constitute a breach of the covenant, and the grantee has no cause of action if she is not disturbed in some way. Brown v Lober

When breach occurs: A future covenant is not breached and the statue of limitations does not begin to run until the covenantee is disturbed in possession

B. Running with the Land: if a covenant for title can be enforced against covenantor by a transferee of the covenantee, it is said to run with the land.

1. Present Covenants: present covenants do not run with the land and cannot be enforced by remote grantees. At the time of breach, the covenant becomes a chose in action (ie a personal right to sue for breach) in the grantee and the chose in action is not impliedly assigned.

2. Future Covenants: future covenant runs with the land if there is privity of estate between the original grantor-covenantor and the remote grantee. In this context privity of estate means that the covenantor conveyed either title or possession to his grantee, who conveyed it to the remote grantee. The

covenant attaches to the fee simple estate or the possessory estate and runs with it to subsequent grantees

Proffitt v. Isley (559): D sold land to Atkinson who sold it to Carter, who sold t to P. Soon after D had bought it he discovered the land had been mortgaged by D and that the mortgage was still outstanding. P sued Atkinson, Carter and D

Covenant of title on a general warranty deed, covenants of seisin, good right to convey angst encum for quiet enjoyment and general warranty. An ecum is any right to interest in land which may subsist w/ a third person to the diminution of the land

No breach against quiet enjoyment; there has to be an interference; there is likely to be a breach once try to sell because of the mortgage hanging over it

Only covenant breached is the covenant against encum and that is a covenant in praesenti and thus can only be brought against the grantor. P did not incur any expenses because of the outside mortgage and the mortgagee mase no attempt to foreclose… so their grantor has a cause of action for technical breach of cov against encum and can recover nominal damages

St. Paul Title Insurance Corp. v. Owen (561): Owen executed a warranty deed to X who conveyed by statutory warranty deed to Y. Y mortgaged the property to GECC, defaulted on his loans and the GECC attempted to foreclose the property. But when they attempted to foreclose, found that he held no right/ interest in the property so GECC brought suit against the P to collect the debt. P brought suit against Owen claiming that he breached the covenants of title in the deeds

Issues similar to other cases, but opposite result: when GECC attempts to foreclose, held that covenants were breached. Damages should be limited to amount of consideration Owen received, but he didn’t receive consideration so GECC gets nominal damages for breach of covenant of quite enjoyment

Damages: Deed was apparently a gratuity; no consideration was ever paid to or received from Ownens. If they can’t be liable for anything more that they received from Y, then it has been turned effectively into a quitclaim deed. No matter what kind of deed you choose, if not supported by consideration, will be no liability for it anyway—so effectively turns a warranty deed into a quitclaim deed. Thus, warranty deed seems meaningless

Use of quitclaim deeds is becoming standard in some places, which is the reason for title insurance

Improvements: does the person who improved the property have recourse for what they’ve done?

a. Betterment Acts/ innocent improver Acts: if improve value of property n good faith (thing you’re the owner) you can get the value of t from the property owner of you find out you’re really not the owner. But f new you weren’t the owner won’t get improvement. Objective value: value of benefit conferred on the owner not what t s subjectively worth to you. *know these statues; what they do, require and where they’re applicable p.566 #2

b. Illustration of Merger by deedc. Estoppel by deed—Doctrine of After-Acquired Title: T= owner

Year one: O A- worth $10,000, Year two: T O- worth $20,00. Why would A be entitled to land in year 3? A sues O n year 3—estopped by deed—O s estopped from saying the he only liable for $10000 because of the warranty given by him in year 1 aka doctrine of after acquired title. Rule is that A will get property immediately after O acquires title in year 3. Shows difference bt warranty and quitclaim deed; A wouldn’t get property if O conveyed by quitclaim deed in year 1… so difference does matter

Legal Descriptions/ Description of Land Conveyed: Property passing under a deed can be described by: Government survey system, metes and bounds and recorded and subdivision plat. If the description in a deed furnishes any means of identification of the property involved, the description is sufficient.

A. Government Survey SystemB. Metes and Bounds: successively describes each boundary line of the property by a

series of calls, which consists of the distance and the direction of travel (the bearing) of each boundary

C. Recorded Subdivision Plat

Record Acts: All states today have recording acts providing for recordation of documents affecting land title. These acts are designed to protect bona fide purchasers of land from secret unrecorded claims. Prior to these acts the common law rule gave legal effect to conveyances in accordance with the time of execution. Thus, a grantee who was prior in time prevailed over one in subsequent in time. This encouraged fraudulent acts by the grantor and imposed great losses on innocent grantees. Thus statutes were enacted to require recordation in order to give notice to the world that the title to property had been conveyed and thus put subsequent purchasers on guard.

A. Mechanics of Recording:1. Filing a Copy: grantee presents the deed to the county recorder and the

recorder copies it, files the copy and returns the original to the grantee2. Indexing: The recorder indexes the deed by entering a notation in the index

book showing in which book the deed can be found reproduced in full. The usual index system included an index for grantors and grantees; tract indexes exist in some places

a. Grantor and grantee Indexes: Separate index volumes are maintained for grantors and grantees, enabling a title searcher to locate an instrument by searching under wither the grantor’s name or the grantee’s name. In the grantor’s index entries are made chronologically as instruments are filed, under the name of the grantors listed alphabetically. The entry includes the grantor’s name, the description of the property, the type of instrument and a reference to volume and page of the deed book.

b. Tract Index: In an urban areas where the land has been broken down into blocks and lots, the recording office may keep a tract index. Entries are made under bock and lot number. All instruments are indexed on a page that deals with the lot to which the instruments

relate. This simplifies title searches because all the entries dealing with a specific piece of land are kept together rather than being found under the names of the many grantor and grantees that have previously owned the property

B. Types of Recording Acts:1. Race Statutes: priority is determined by who records first2. Notice Statutes: a subsequent bona fide purchaser prevails over a prior

grantee who fails to record. The subsequent purchaser wins under a notice state if ha has no actual or constructive notice of a prior claim at the time of conveyance

3. Race-Notice Statutes: Protect only subsequent purchasers w/o notice of the prior claim, but only protect a subsequent bona fide purchaser of he records before the prior grantee

C. Effect of Recordation: Proper recordation gives the grantee the protection of the recording system. After recordation all persons who thereafter take an interest in the land have constructive notice of the existence and contents of the recorded instrument, and no subsequent purchase w/o notice can arise.

D. Requirements for Recordation: The fact that an instrument has been coped and entered in the record’s office does not necessarily mean that the instrument has been recorded. The instrument must be entered in the recorder’s books in a manner complying with the applicable statue or judicial decisions

1. Failure to Index: occasionally a clerk in the recorder’s office fails to index an instrument properly. Is the grantee of such an instrument protected against a subsequent bona fide purchaser? Some protect the grantee, on the theory that by delivering the deed for recordation the grantee has done all that could reasonably expected to be done to give notice of her interest. The other and referred view protects the subsequent bona fide purchaser; until an instrument has been properly recorded and indexed there is no reasonable way to find it.

2. Indexing under a misspelled name: If indexed under a misspelled name, doe it give constructive notice? Some apply the doctrine of idem sonans (if the written name sounds the same as the pronunciation of the real one, it refers to the correct person). This doctrine has lost popularity, especially with the introduction of computers and recent cases hold that the instrument does not give constructive notice unless it identifies the party by the correct name

Zimmer v. Sundell (632): O A, unrecorded ; A B, unrecorded; O C, unrecorded; C D, recorded.

Under pure notice jurisdiction C takes propriety over A and B. See notesFrank v. Storer (635): Wayne have promissory note from Storers, which was secured by a deed of trust to Frank. Storers and Waynes entered into an agreement modifying the deed of trust and agreeing to transfer the security interest the land to another lot. Storers conveyed land to Glenn, who did not know about the modification agreement or the Wayne’s lien. Foreclousre and Glenn claims deed of trust did not cover the land because it was not recoded properly

There was no reference to the book and page #; clerk could have found original by running an index search, but didn’t and wouldn’t until they told him where the original was

O A recorded, but not indexed; O B w/o notice. Normally A would win, but if A knows it’s not indexed they are negligent and B has title.

A is the cheapest cost avoider; could always check record Doctrine of Idem Sonans: sounds the same; eg Bolen v. Bollen; Sepeta v. Zapeta

Skelton v. Martin (642): P claims no notice of tax lien because electronic/ computer title search did not show it

No present right to accurate gov information; computerized data is not a form of notice constitutionally guaranteed by the article

E. Bona Fide Purchasers: In general only a bona fide purchaser is entitled to protection under notice and race-notice statutes. To be a bona fide purchaser a person must 1) be a purchaser 2) who takes without notice (including actual, record or inquiry notice) of the prior instrument and 3) gives a valuable consideration. If a person does not meet these requirements, he is not protected by the recording acts.

1. Purchaser: all recording acts protect purchasers of the fee simple or any other interest in the property. Some recording acts expressly apply to mortgages as well as to purchasers.

2. Without Notice: To be protected by a notice or race-notice statue, a subsequent purchaser must be without notice. Without notice means, that the purchaser has no actual, record, or inquiry notice of the prior claim at the time he paid consideration and received his interest in the land

a. Actual notice: if a subsequent actually knows of the prior instrument, he has actual notice is not a BFP. Proof of actual notice depends on extrinsic evidence

b. Record notice: if an instrument is properly recorded, any subsequent purchaser has record notice and is therefore not a BFP. Record notice is one form of constructive notice that the law imputes to the purchaser whether or not he actually knows

c. Inquiry notice: Inquiry notice is another form of constructive notice. Under certain circumstances, a purchaser is required by law to make reasonable inquires.

3. Valuable Consideration: to be protected under the recording acts, a purchaser must give valuable consideration. Valuable consideration must be more than merely nominal, but it does not have to equal the market value of the property Geo M. McDonald & Co v. Johns (623)

4. Bona Fide Purchase Filter: Cherogosky v. Crosstown Bell, Inc. (626)

In re Barnacle (611): Mortgage on Barnacle’s property – wife forgot to sign. They went bankrupt. The trustee is deemed to be a BFP of the mortgaged property as of the filing of the bankruptcy (legal construction).

Issue: whether failure to execute mortgage document that is recorded, gives constructive notice.

Most jurisdictions say if instrument is defective because it is not signed, then there is no constructive notice (record notice and all notice inferred by law).

Crt does not agree and says that if there is a defective instrument w/ correct title, failure to search would result in protections, while discovery duty to inquire; rewarding failure to search. Instrument was sufficient notice

J.C. Penney v. Giant Eagle (615): Shopping center leased to pharmacy and n lease gave them the exclusive right to run the pharmacy; retained land was subject to a restriction. Land was conveyed away to D and there was no mention of the restriction. D wants to run a pharmacy.

Both are sophisticated buyers and should have knowledge and not violate restrictions Lease memo which said nothing about restriction was on file but the lease memo should

alert them that there is a lease and they were obligated to find it. Argument that is not addressed s why should D be bound by a lease that did not exist at

the time they took their lease? Could say because lease is structured to continue.Methonen v. Stone (619): X had land w/ well that provided water for other subdivisions. X conveyed to Y who conveyed to D via statutory warranty deed that sad was “subject to easements restrictions etc.” D refused to supply water to others claiming that real estate agent led hm to believe that he did not have an obligation to provide water. Y owners of other subdivisions sue.

Crt reverses grant for SJ for Y because there are genuine issues of material fact as to whether Y was entitled to water easement. Why? Neither deed said anything about supplying water so arguably X had no actual or constructive notice. But also say that he had a duty to investigate. See notes

Chergoksy v. Crosstown Bell (627): D1 leased property to D2 for 20 yrs + option to buy. D1 conveyed P his interest in the property, w/ option to repurchase. P did not record until 1985. D1 took out mortgage to secure a loan from S. D2 wants to exercise option to buy, and D1 disputes timeliness of request. Meantime G buys out S. G claims property over P because has second mortgage through BFP (S) who recorded before they did. There wasn’t any other to get constructive notice

Under Minn Recording act, one who records first has superior title. Bona Fide Purchaser Filter Rule: BFP of property which was subject to a prior

outstanding unrecorded interest may pass title free of the unrecorded interest to a subsequent purchaser who otherwise would not qualify as BFP under the recording act. Protects the alienability of property

Griffith claims priority over the interest in the leftover funds from sale to D2 under the protection of the BFP rule.

a. All law requires to give BFP priority over prior interest is ignorance of the true state of the title at the time of purchase

b. Filter: once BFP has est title by recording w/o notice, that title is good as against all the world, even though all world has notice of the other interests

c. But the exception to the filter—is that the subsequent purchaser cannot be a prior owner or interest holder

I.e. O A unrecorded O B (BFP) B O recorded

d. Then O v. A, A prevails because O is essential defrauding A – this filter is a kind of estoppel – prevents the owner from defrauding A and cleaning up the title. O isn’t the same as G; G isn’t really

defrauding, but he is estopped from claiming priority because he had an interest in property common w/ D1 in effect they agreed to pool their interests and share in the outcome of the case

e. If G was innocent purchaser w/o notice, he could have asserted priority—but since the K he signed specifically gave him notice of the K for deed

F. Exclusions from the Recording Act:1. Validate invalid deed: 2. Protect against interests arising by operation of law. Eg A adversely possess

Blackacre for the period of the statue of limitations. O the record owner then coveys Blackacre to B, a bona fide purchaser. Even though A’s interest has never been recorded and a look at the premises would reveal nothing of A’s claim, A prevails against B. Mugaas v. Smith

Mugaas v. Smith (645): P claims strip of land through AP even though fence is gone and ther eis no dividing line

P prevails, even though seems because no fence, D did not have notice AP is outside the recording act Mechanics lien, Forged/ defective documents, Deed executed by incompetent all may

lead to the false state of title Mountain States Telephone and Telegraph Co. v. Kelton (649): P had an easement to install telephone cable and owner promised not to interfere w/ business. D hired contractor that destroyed cable

Crt: contractor was not bund to search the record to learn about P’s easement Why aren’t Kelton’s employer’s liable; they should have known about the easement

Torrens Registration: Title (Torrens) registration is a system of a title assurance entirely separate from the recording system. Basic principle of title registration is to register title to land, instead of recording evidence of title (as under the recording system). Title registration is built around three ideas: 1) getting title adjudicated by a court, then keeping it up to date by 2) installing a tract index, and 3) making the public records conclusive

A. Initial registration: First, a judicial proceeding is started by the owner to clear away all past claims and adjudicate present title. A title searcher is appointed by the court to investigate the records and report to the court. Notice is given to all interested parties, after which the court approves the report of the situation of the title. The court issues a certificate of title binding with few expectations, on all the world.

B. Tract Index: Once a certificate of title is issued it is indexed in a tract index.C. Defects in Conclusiveness: p.656

Title Insurance: A. There are two types of title insurance: p. 657B. Extent of Coverage:

1. Record Title Insured: the title insurance company or its agent ordinarily conducts a search of record title only and does not go outside the records nor inspect the premised. Accordingly the standard policy insures only a good

record title as of the policy’s date. In essence the policy only insures the accuracy of the records and agrees to defend the record title if litigated.

a. Record Title: generally coextensive w/ instruments properly recorded w/in the insured’s chain of title. An instrument not in the insured’s chain of title is not insured against.

C. Exclusions: The standard title insurance policy foes not insure against loss arising from the following defects:

1. Liens imposed by law but not shown by the public records2. Claims of parties in possession not shown on the public records3. Boundary disputes4. Easements o servitudes not shown on the public records5. Zoning or building ordinances6. Hazardous Wastes

Swanson v. Safeco Title Insurance Co (671): Swanson bought land and partially financed the purchase w/ a proissory note secured by a deed of trust. Before this J has been named as beneficiary on a deed of trust involving an easement over part of the property. When S bought property also got insurance from D. S tried to refinance house and found that did not have marketable title and were forced to foreclose Greenberg v. Stewart Title Guaranty Co. (677): P buys condo and gets it insured by D. P tries to sell units and found did not have marketable title so had to forclose

ESTATES IN LAND

Fee Simple:1. Fee Simple Absolute: absolute ownership of potentially infinite duration and there

are no limitations on its inheritability. It cannot be divested and will not end on the happening of any event.

a. Words of Purchase and Words of limitation: Estates are created using the appropriate words in a deed or will. Words of purchase identify the person in whom the estate is created. Words of limitation are words describing the type of estate created. Eg. O conveys to A and their heirs. “to A” are words of purchase (signifying that person takes by deed or will and is not intestate) “and her heirs” are words of limitation indicating a fee simple.

b. Remember: a grant to “A and her heirs” gives A’s heirs no interest in the property; they’re only words of limitation that indicate that A takes a fee simple. A can sell devise by will or do anything she wants and thus can deprive her heirs of the land. Johnson v. Whiton

2. Defeasible Fees: a fee simple can be created so that it is defeasible on the happening o some event, and the owner of the fee simple then loses, or may lose the property. If the fee simple is defeasible, it of course is not absolute. There are there different kinds of defeasible fees simple (note: all of these fees are called fees simple because they have the potential of infinite duration, although not the certainty):

a. Fee Simple Determinable: a fee simple estate so limited that it will automatically end when some specified event happens.

It is a fee simple because it may endure forever, but if the contingency occurs, the estate automatically ends; estate terminates immediately on the occurrence of the event- nothing further is required- and the fee simple automatically reverts to the grantor

Created by language that connotes the grantor is giving a fee simple only until a stated event happens: “until,” “while,” “as long as”

Eg. O coveys to Blackacre “to School Board so long as the premises are used for school purposes.” “So long as” are words of limitation, limiting the duration of the fee simple given. School Board has a fee simple determinable that will automatically end when Blackacre ceases to be used for school purposes. When that happens, the fee simple goes back to O. Peters v. East Penn Township School District

May be transferred or inherited in same way as any other fee simple, as long as the stated event has not happened. But the fee simple remains subject to that limitation no matter who holds it. Hall v. Hall

b. Fee Simple Subject to Condition Subsequent: fee simple that does not automatically terminate but may cut short at the grantor’s election when a stated condition happens

Does not automatically end on the happening of the condition; estate continues in the grantee until grantor exercises her power of reentry and terminates the estate; grantor has the option of exercising the power.

Created by language that gives the grantee an unconditional fee simple and then provides that the fee simple may be divested by the grantor or her heirs if the specified condition happens: “but if,” “upon condition”

Eg. O conveys Blackacre to A, but of liquor is ever sold on premises, grantor has the right to reenter the premises.

May be transferred or inherited like any other fee simple until the transferor is entitled to and does exercise the right of reentry.

3. Restraints on Alienation: Tie up land for future generations by explicitly providing that the grantee may not alienate the property.

a. Restraints upon alienation of a fee simple are generally voidb. A life estate however, may be subject to restraints c. Indirect restraint: Certain types of indirect restraints on the use are okay.. Eg

defeasible estates (eg fee simple determinable) can be viewed as a permissible restraint: O A and his heirs, but if the property shall ever be used for purposes of the sale of alcohol.

Johnson v. Whiton (221): D and other grandchildren contracted to sell land to P. D objected to D’s title to convey and filed suit to get his deposit back. Clause in question: “after the decease of all my children, I give devise, and bequeath to my granddaughter Sarah Whiton and her heirs on her father’s side…”

“heirs on her father’s side” are words of limitation, not words of purchase

By old English law to take land by descent a man must be of the blood of the first purchaser. For instance if Sarah’s father acquired the property it could only descend to the heirs on her father’s side. This is like the rule of French Customary law. In England inherited property may stay in one line, but not in Mass and therefore invalid

Equitable v. Legal title: At common law husband had right to wife’s property equitable title preventing husband from extending his reach

“Heirs”: simple to define estate that is take in a fee simple. Heirs on father’s side is a new inheritance in Mass and therefore invalid

Could have saved this estate by creating a trust in Sarah… w/ defined takers Nemo ast haeres viventis: no one is an heir to the living

Hall v. Hall (224): Husband conveyed land to wife (P) but “if marries another man, deed is void and goes to children.” P conveyed land to a third party and other family members objected. P thought she had a fee simple absolute and D thought she had a fee simple subject to a condition subsequent.

Conditional gift; never remarrying; of she does gift goes to the children of Hall A lot of attention paid to the intention of Hall; crt says usually granting clause will

govern, but in this case where it is clear and unequivocal the will of the grantor is followed

Peters v. East Penn Township (227): Peters conveyed property to D “as long as it is used for public school purposes.” Property is no longer used for school purposes. P, Peter’s heir brought suit.

Crt says clause creates a fee simple determinable; a fee that is determinable when the land is no longer used for the stated purposes

A reverter clause is not needed because the implication is clear

Mountain Brow Lodge v. Toscano (230): P given through gift deed land from Toscano. Trustees from Toscano’s estate want to quiet title. Conveyance read “said property is restricted for the use and benefit of the second party, only; and in the event the same fails to be used by the second party or in the event of sale or transfer by the second party, the same is to revert to the first party.” P claims this is an absolute restraint on alienation and is void, D claims it is a fee simple subject to a condition subsequent.

Crt says it’s a fee upon condition subsequent; by process of elimination that’s the closest one that fits. It’s not a fee determinable because there’s no language of duration. It’s not an easement there’s limit on the use of land. It’s not a covenant because there’s no promise; just restrictions

Reasoning behind restraints on alienation: 1) Don’t want people who don’t have the right to alienate property to pretend that they do. 2) Modern reasoning: Rules encourage transfer of land to the person who values it the most.

Bank of Powhattan v. Rooney (233): H. Rooney devised D some land but could not sell “until three years after his death.”

Even a limited restraint on alienation is invalid Disabling v. Forfeiture restraints: Rooney is a disabling restraint; no alienation at all and

are usually invalid. Forfeiture is when there is an attempt to alienate but the property goes to someone else. A promissory restraint is: O A and his heirs, but if A alienate, he pays $2000

Raises question of whether it is better to have a flat rule and restrict alienation or allow reasonable restraints

Estate of Elizabeth Beck (236): Beck gives step-daughter, Beck, ¼ interest in her estate, but whole amount goes to her via executor and not to creditors. Creditors want the property. Crt says no

Crt says it was a gift upon the express condition that it be delivered directly to her There is a restraint in this case, but it’s okay. Difference between this and Rooney is that

there was no trust in Rooney

The Fee Tail: In feudal England, land was the basis of family power, status, and wealth. One of the chief objectives of landowners, particularly large landowners, was to keep land in the family. The fee tail was invented for that purpose- to keep the land and safe for succeeding generations.

I. History: Fee Simple Conditional Fee Tail: First attempt of the landed lords to tie up and in the family was a fee simple conditional. This was created by a grant “to A and the heirs of his body.” Judges held that A could convey a fee simple if a child were born to A. Thus, A’s estate was thought of as a fee simple conditional upon having issue. If A had issues, A could convey a fee simple and transfer the land outside the family, cutting off the rights to A’s issue and reversioner. People were not happy that A could convey land outside the family of A had a child, so fee tail was create

II. Nature of Estate: Fee tail has two principal characteristics: 1) it lasts long as the grantee or any of his descendants survives and 2) it is inheritable only by the grantee’s descendents.

III. Creation of Fee Tail: A common law, a fee tail was created by an instrument using words of inheritance and words confining succession to the issue of the grantee: “to A and the heirs of his body.” The term “heirs of the body” refers to the grantee’s issues or lineal descendants. It includes not only children, but grandchildren and more remote descendants as well. The fee tail goes to each succeeding generation in turn.

IV. Characteristics: A. During Tenant’s life: Tenant in fee tail for the time being can do nothing to

defeat the rights of the tenant’s lineal descendants. In practical effect he only has a life estate. On the death of the tenant in fee tail, land automatically goes to the lineal descendants. *Remember: could disentail

B. On tenant’s death: Fee tail can be inherited only by the issue (lineal descendants) of the original grantee, and not by his collateral kin. If blood descendants of the original grantee run out, property is returned to the original grantor (or his heirs). The fee tail cannot be devised by will.

V. Types of Fee Tail: A. Fee tail general: Unless otherwise specified in the grant, a fee tail was

inheritable by any issues of the fee tail tenant.B. Fee tail special: Inheritable only by the issue of a grantee of a specific spouse:

to A and the heirs of his body by his wife BC. Fee tail male: Limited succession to male descendants of the grantee by

granting to “A and the male heirs of his body”D. Fee tail female: Same as male, but uncommon

VI. Future Interests Following Fee Tail: it was important to the aristocracy that when the fee tail expired, it return to the family. Following are future interests:

A. Reversion: O conveys Blakacre “to A and the heirs of his body.” A has a fee tail; O has a reversion in fee simple to become possessory upon expiration of the fee tail

B. Remainder: O conveys Whiteacre “to A and the heirs of his body, and if A dies without issue, to B and her heirs.” A has a fee tail; B has a vested remainder in fee simple to become possessory on the expiration of the fee tail. B’s interest is a remainder, rather than a reversion, because a reversion can be created only in the grantor or testator’s heirs

VII. Disentailing: Judges perceived a lot of mischiefs in the fee tail, keeping land in the family generation after generation: 1) children would be disobedient; 2) treason (but the punishment is so severe!); 3) encourage people to enter into mortgages and dupe people. (These are all silly; be prepared to argue against them.) So judges created a fictitious law suit so a tenant in fee simple could walk out with a fee simple absolute.VIII. Modern Law: Fee tail has been abolished all except four states (fee tail caused lots of disputes; farmers were ousted by their leases made by tenants in tail; creditors were defrauded of debts since might defeat the issue’s interest). Raises question, what estates are created by a transfer “to A and the heirs of his body”? Solutions:

A. A has a life estate: A few states hold that A has a life estate, or what amounts to the same thing, an unbarrable fee tail for A’s life, with a remainder in fee simple to A’s issue

B. A has a fee simple: Majority of states hold that A has a fee simple. Half say that A has a fee simple absolute, the justification for which is that since A could disentail and convey a fee simple absolute, the law will treat A as having done so. Other say A has a fee simple, but any remainder to become possessory on failure of issue is given effect if and only if, A leaves no descendants at his deathEg: O Blackacre to A and the heirs of his body, and if A dies w/o issue, to B and her heirs. In half the states, A takes a fee simple absolute, and A’s issue and B take nothing. In other half, A takes a fee simple and A’s issue take nothing, but B takes a future interest that will become possessory if and only if at A’s death no issue of A are alive. If A leaves issue at A’s death, B’s interest then disappears.

C. A has a fee simple conditional: Gives A a fee simple conditional. If A has a child, A can convey a fee simple. If a child is not born, A’s estate ends at A’s death.

D. Drafting: No competent lawyer today will use the phrase and to the heirs of his body. Litigation may arise over its meaning and you can carry out the grantor’s intent more specifically by creating a life estate in A followed by a remainder.

Armstrong v. Smith: Dispute bt mom and kids; kids thought that “unto daughter and offsprings or heirs” meant that mom and her kids that were living were given a fee simple, to be divided among them

Crt found she had a fee tail; “offspring” was considered to be a word of limitation and not purchase.

Also makes sense because deed said “land cannot be mortgaged or sold,” which is a restriction on alienation

Unlike Johnson v Whiton, where there are no words of procreation, this case “offspring” has words of procreation

Rule in Wild’s case: if the owner of the property takes w/ his children ie to A and his children, then children then living take in equal shares w/ the parent and future children have no interest

Life Estate: A life estate is an estate in land measured by the duration of the life or lives of one or more persons. Life estates are popular today, particularly life estates in trust. When property is held by X in trust for A for life, A is entitled to all the rents and profits or other income from the property.

A. Types of Life Estates:1. For life of a grantee: The usual life estate is measured by the grantee’s life.

Eg: O conveys X to “A for life.” The grantee, A, gets an estate in the land for so long as A lives. On A’s death, the land reverts to O, the grantor

2. Pur autre vie: Where the estate is measured by the life of someone other than the owner of the life estate.

3. In a class: A life estate can be created in several persons, such as to “the children of A for their lives, remainder B.” Where a life estate is given to two or more persons, main question is: What happens to the share if the first life tenant dies? Does it go to the surviving children or B? It goes to the surviving life tenants and the remainder does not become possessory until all of the life tenants die.

4. Defeasible Life Estates: Like a fee simple, a life estate can be created so as to be determinable, subject to condition subsequent, or subject to an executory limitation

5. Construction problems: Sometimes it is not clear what estate is created by the language used. Courts must then construe the instrument to determine whether the estate conveyed is fee simple, life estate, or leasehold estate. Each case depends on its own facts and the probable intent of the grantor.

B. Alienability of Life Estate: A life tenant ordinarily is free to transfer, lease, encumber or otherwise alienate her estate inter vivos, but there is not much of a market inlofe estates because the uncertainty of the duration. For eg a mortgage lender may require extra security for making a loan secured by a life estate. Transferee gets no more than the life tenant had- an estate that ends at the expiration of the measuring life

C. Limited Utility of Life Estates: Legal life estate is of limited utility because it is a very inflexible way of providing for successive ownership. It is possible for X to do what he desires if all of the owners of the remainder are adult competent, and consent. But if one of them is a minor, consent cannot be given; X may be locked into an inflexible position.

D. Waste: conduct by the life tenant that permanently impairs the value of the land or the interest of the person holding title or having some subsequent estate in the land. Life tenant has a duty to maintain property in a reasonable state or repair as necessary

to preserve the value for the future holders. There is no duty to make extraordinary repairs. Improvements destroyed by earthquake or fire through no fault of tenant need not be rebuilt.

1. Rationale: There are two ideas underlying the doctrine of waste and the court may choose to emphasize one or the other in a particular case. 1) Grantor intends that the life tenant shall have the general use of the land in a reasonable manner, but the land shall pass to the owner if the remainder as nearly as practicable unimpaired in its nature, character and improvements. 2) Where two or more persons own interests in land, fairness requires that one shall not impose severe economic damage to the other.

2. Types of Waste: a. Affirmative/ voluntary waste: when life tenant actively cause

permanent injury by, for eg, destroying buildings, removing natural resources.

b. Permissive/ involuntary waste: occurs when land is allowed to fall into disrepair, or tenant fails to take reasonable measures to protect land from the elements. Failing to pay taxes is permissive waste

i. Insurance: A life tenant is not obligated to get insurance, nut a trustee is

c. Ameliorating waste: occurs when the land value is changed, but the change increases the value of the land. Eg. Brokaw built house on 5th Ave. He devises to son “my residence” with a remainder to B. Son wants to tear it down and build apartments. Son can’t tear it down; “my residence” plus still in an area of houses. Weakness in Brokaw: Majority does not consider what Brokaw would have done if he was still alive. Brokaw v. Fairchild

d. Current use undesirable: If house is located in an are where the neighborhood has drastically changed, and would think that the original owner would have wanted to make the change, then it’s ok. Melms v. Pabst Brewing Co.

3. Remedies for Waste: owners remainder can enjoin threatened waste by the life tenant or recover damages

E. Sale of Property by Court: If life tenant and the owners of the remainder are alladults, competent and agree a fee simple in the land can be sold

Thompson v. Baxter (245): P acquired land from owner, but owner had had leased D the property “while he shall wish to live in Albert Lea.”

Crt found that it was a life estate. Crt is reluctant to create new category so had to fit into one of the existing ones: 1) tenancy at will uncertainty in term and can be terminated by either party w/ notice; 2) tenancy at sufferance tenant wrongfully stays past the expiration of the term; 3) periodic tenancy no definite time is agreed upon; terminable at the end of the month or year, but if it is not terminated, then it renews; 4) term of year or months last for a specified number of years or months.

Life estate is a freehold interest (fee simple, absolute, etc) v. Leasee estate is a leasehold (term of year, periodic, of will, and sufferance)? See notes

Odd that court didn’t ask owner what he wanted

Smith v. Smith (249): Mom give daughter “home…to be used by her as a home as long as she wishes and in case she shouldn’t use it as such and wishes to sell it then the proceeds are to be divided bt daughter and son.” Daughter says she has a fee simple; son thinks she a life estate.

Crt says she has a life estate because “as long as she wishes” are considered to be words of limitation rather than words of purpose. This is different than Peters, where “as long as used for school purposes” was found to be a fee determinable

Crt says if it was a fee simple, there would be no language about her power to sell Because it is a life estate, leaking roof and rotting floor is considered permissive waste.

New York O & W.R. Co. v. Livingston (256): Livingston conveyed to Morss “the children … shall forever estopped and barred from claiming title.” Morss conveys to P and P constructs a railroad.

Life tenancy was one pur autre vie (for the life of another) to cease at the death nephew, because all he had to give was a life tenancy

RR entry was in good faith, so crt was more lenient; if enters lawfully upon land and improves it in good faith, may exclude the value of the improvements in proceedings

Meliorating waste: added value; improving instead of injuring the remainderman’s inheritance

Tillman v. Richton Tie and Timber Co. (259): Tillman acquired a life estate and conveyed property and it to X, while state was to acquire property for unpaid taxes and then Tillman got it back and conveyed to D. Issue: whether timber company will greater interest than life tenancy

When taxes are not paid, crt initiates proceedings to take property, but they don’t eject you; still have an interest in the property for a while

Property came back to Tillman’s hands and he tried to convey a fee simple to the timber company, but crt said that Tillman could not buy a fee simple via the tax sale rather than the life estate that he previously had because you can’t use your own failure (failure to pay taxes) to get more than you had before inconsistent w/ law, which only allows you the title that you’re given

Marital Estates I. Common Law

A. Dower: At common law, a wife has a dower in all freehold land 1) of which her husband is seised during marriage and 2) which is inheritable by issue born of marriage. Dower is a life estate in 1/3 of each parcel of qualifying land. Eg. H dies, owning X in fee simple. W is entitled to a life estate in 1/3 of X. H’s heirs and devisees take X subject to W’s dower

1. Land seised during marriage: Dower attaches only to land of which the husband is seised during marriage. Husband has to be in possession of a freehold estate. Thus, dower does not attach to any leasehold interest of the husband, not to any remainder interest the husband has following a life state of another. The dower also does not attach to the personal property of the husband, in which there is no seisin, or to any equitable interest of the husband, where the trustee holds seisin.

2. Land inheritable by issue: For dower to attach, it must be possible for issue born of the marriage to inherit the land from the husband. Actual birth is

immaterial. Thus, dower does not attach to land in which the husband has only a life estate or to land the husband owns w/ another person as joint tenants w/ right of survivorship.

3. Rights during husband’s life: Dower attaches to the land the moment the husband is seised during marriage. Until husband dies, dower is inchoate (word indicating that the wife has an interest that is not yet, but may become possessory). Once inchoate dower attaches, the wife prevails over any subsequent purchasers of the property and over any attaching creditors of the husband. They take subject to her dower.

a. Release of dower: Because dower rights prevail over subsequent purchasers, a purchaser from a married man must have his wife release dower in order to take free of it. This means the wife must sign the deed, releasing her dower. If the purchaser does not know if the seller id married, the purchaser takes the risk. Rule: Once the inchoate dower has attached, a wife cannot lose dower unless she consents of the couple is divorced.

b. An absolute divorce puts and end to marriage and dower; legal separation does not.

4. Rights on husband’s death: On husband’s death, dower gives wife the right to possession for her life of 1/3 of each parcel of land subject to the dower.

B. Curtesy: At common law, on wife’s death, a surviving husband has curtsey, which is comparable to dower, but different:

1. Husband has curtesy only if issue were born of the marriage2. Husband received a life estate in all of the wife’s lands and not merely a 1/3.

Reflects notion that males should control land whereas females just need support

II. Statutory Changes:III. Community Property: Eight states (Arizona, Cali, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington) have community property between married couples.

A. Theory: Community property rests on notion that husband and wife are a marital partnership/ community, that both contribute to the marital success of the marriage and that both should share equally in material acquisitions. Community property is owned in equal undivided shares by the spouses. Community property recognizes and rewards the work of a spouse who stays at home and does housework. Common law property does not.

B. What is Community property: Community property consists of earnings of either spouse during marriage and property acquired through earnings. Property owned by wither spouse before marriage or acquired after marriage by gift, descent, or devise is separate property. This division of property follows from basis theory that husband and wife share equally material acquisitions resulting from the labor of either during marriage.

1. Income from community property: Once property is characterized as community property, all income and proceeds of the sale of the property are community property. If new assets are purchased w/ community funds, the new assets are community property.

C. Conveyance of Share: Neither spouse acting alone can convey his or her share of the community property, except to the other spouse. However, by agreements of the

parties, community property may be converted into the separate property of either spouse, or conversely, separate property may be converted into community property.

D. Migrating Couples: Property rights in earnings are determined by the state of domicile when the property is earned. If the couple is domiciled in a separate property sate, the earnings of each are the separate property of each. If domiciled in a community property sate, the earnings of both are community property. Once the property rights are determined, they do not change if a couple changes domicile. Community property acquired in a community property state remains community property when the couple moves to a common law property state. Similarly, separate property from earnings acquired while the couple was domiciled in a common law property state remains separate property when they move to a community property state. In re Kessler

Melenky v. Melen (262): Father conveyed property to son to mangage w/ understanding that son would reconvey. Father remarries. Son conveys a life estate rather than a fee simple. Father dies. Widow wants her dower.

Cardozo finds for son. In order for widow to have a dower, needs husband to have had an estate of inheritance

In re Kessler’s Estate (266): Couple lived in CA during which they acquired stock, they moved to Ohio. Husband dies. Issue: whether wife should pay taxes for ½ of the property that became hers. She claims that it was hers all along. Crt says she has to pay.

Crt says that husband had control all along; that she did not have full control of assets and that she only becomes fully vested when his management ceases

Purpose of Ohio statute is to keep people from taking jointly to avoid taxes

IV. Homestead Rights:

Concurrent Estates: Preceding chapters dealt w/ successive ownership. Property can also be owned by 2 or persons concurrently. Eg. A and B can be concurrent owners of a possessory fee simple, a life estate or remainder. Common law recognized three forms of concurrent ownership: tenancy in common, joint tenancy, and tenancy by the entiretyI. Tenancy in Common:

A. Only unity of possession is necessary to create a tenancy in common. B. Tenants in common have an undivided interest in the propertyC. There is no right to survivorship; thus when one does his interest passes to his

devisees and heirs and not to the surviving tenant in commonD. In earlier days, presumption was that a grant to named individuals created a joint

tenancy, but now a conveyance to A and B creates a tenancy in common. E. Alienability: A tenant in common can sell, give, devise etc his undivided share as if

he were the sole owner of the property. The new owner would just take his place as a tenant in common

II. Joint Tenancy:

A. Per my et per tout (by the half and by the whole): Each owned an undivided interest in the whole and one the death if one tenant dies, the property automatically passed to the surviving tenant. This distinguishes it from a joint tenancy.

B. Four unities required for creation of joint tenancy:1. Title: All joint tenants must acquire title by the same instrument or joint

adverse possession2. Time: The interest of all joint tenants must be acquired at the same time3. Interest: The shares of all joint tenants must be equal, undivided and identical

in duration4. Possession: All joint tenants have equal right to possess the whole, in the

absence of express agreement to the contrary* if any one of the unties is destroyed, the estate becomes a tenancy in common

C. Creating a Joint Tenancy: A common way of creating a joint tenancy is to convey property “to A and B as joint tenants, and not as tenants in common” or “to A and B, with right of survivorship, and not as tenants in common.”

D. Termination of Joint Tenancy: 1. Conveyance by a joint tenant: Each joint tenant has the right to convey his

interest. A conveyance of his entire interest or share severs the joint tenancy with respect to that share. Either a conveyance to a third person or to another joint tenant severs the share conveyed from the joint tenancy

2. Conveyance to self: Under old law a joint tenant who wished to convert the tenancy to tenancy in common had to convey to a strawman, who conveyed it back to the joint tenant. The common law required that in order for the transfer to be legal, one person must convey to another person and not to himself. Recent cases have permitted a joint tenant to sever the tenancy by conveying to herself and not through an intermediary. Riddle v. Harmon

3. Death: If a joint tenant dies during pendency of the action to partition, title to jointly owned real estate passes to the surviving joint tenant. Allison v. Powell

III. Tenancy by the Entirety: A. Can only exist between a husband and wifeB. Couple holds as one person, and (unlike the estates in doer and curtesy) the surviving

spouse takes the whole upon the death of the otherC. Husband and wife together can sever the tenancy, but neither acting alone can do so D. Divorce terminates the tenancy, because it terminates the marriageE. Only about ½ of the states recognize these tenancies and commonly created by

conveying “to A and B, husband and wife, as tenants in the entirety”

Camp v. Camp (274): Mom and son purchase house, grant conveyed “as tenants in common w/ right of survivorship.” Son married and then died. Mom says lawyer made a mistake and intended them to be joint tenants, wife says they’re tenants in common

Crt goes with the language and not the intent of the parties

Riddle v. Harmon (278): Wife wanted to terminate joint tenancy with husband and had the attorney prepare a grant deed whereby she granted herself an undivided ½ interest in the property.

At common law one could not create a joint tenancy in himself another by a direct conveyance; have to use a strawman

Crt reexamines issue and decides that a strawman is not necessary; not giving the person any more rights

Allison v. Powell (283): Allison filed a complaint to obtain partition in real estate. Allision dies before the complaint was served. Allison’s executrix thought letter agreeing to sell part of land was sufficient.

Crt said that letter just indicated negotiations and did not comply w/ the statue of frauds.

Helomholz: severance v. partition: After a severance, still remain tenants in common, but after partition, own land separately.

Reversions, Reverters, and Powers of Termination: all are future interests (a nonpossesory interst capable of becoming possessory in the future; it is a present interest in the sense that it is presently existing, but it is not a presently possessory interest. I. Overview: Just as possessory estates are limited in number (fee simple, fee tail, life estate, leasholds) so are future interests. Only five categories of future interests: reversion, possibility of reverter, right of entry, remainder (vested and contingent) and executory interest.

A. If future interests is retained by the grantor, the future interest must be either a reversion, possibility of reverter or right of entry. Possessory estates and their correlative future interests in the grantor: Life estate reversionFee simple determinable possibility of reverter Fee simple on condition subsequent right of entry

B. If the future interest is created in the grantee, the future interest must be either a remainder or an executory interest.

C. Future interests can be legal future interests or equitable future interests. Legal future interests are created w/o the imposition of a trust.

II. Reversion: Future interest left in the grantor after he conveys a vested estate of lesser quantum than he has. A reversion may be expressly retained (O A for life, then to revert to O) but if not expressly retained it arises by operation of law (O A for life, has a reversion in fee simple in O by operation of law.

A. Quantum of estates: reversion arises when the grantor transfers a vested estate of lesser quantum than he has. Hierarchy of estates: Fee simple is of longer duration than a fee tail; fee tail is longer that a life estate; life estate is longer than a leasehold estate.

B. Reversions are vested interests: All reversions are vested interests even though not all reversions will necessarily become possessory. Some will certainly become possessory (O A for life, reversion to O) other may or may not (O A for life, remainder to A if B survives A; O has a reversion because if B dies before A it returns to O at A’s death. This is not called a contingent reversion; all reversions are vested.

1. Significance of reversion being vested is that it is alienable, accelerates into possession upon the termination of the preceding estate and is not subject to the Rule or Perpetuities.

C. Alienability: A reversion has always generally been regarded as fully transferable both inter vivos and by way of testate or intestate succession. Transferee gets only what transferor had—an interest that cannot become possessory until the preceding estate terminates.

D. Reversion v. possibility of reverter: Reverter arises where the grantor carves out of his estate a determinable estate of the same quantum (usually where grantor conveys a fee simple determinable). Reversion arises where the grantor conveys a lesser estate than he has and does not in the same conveyance create a vested remainder in fee simple.

II. Reverter: possibility of reverter arises when a grantor carves out of her estate a determinable estate of the same quantum. In most cases a possibility of reverter follows a determinable fee not some lesser determinable estate. For all practical purposes, a possibility of reverter is a future interest remaining in the grantor when fee simple determinable. (eg O A and his heirs so long as liquor is not sold on the premises,” A has determinable fee; O has a possibility of reverter). A possibility of reverter cannot be created in a grantee. The analogous future interest created in a grantee is called an executory interest.

A. Alienability: At common law, a possibility if reverter could not be transferred inter vivos because it was not viewed as an existing interest, but a mere possibility of becoming an interest. However, at death of the owner of the reverter, it was treated as a thing and descended to the owner’s heirs. Modern Law: in most jurisdictions, reverter is freely alienable during life and by will because reverter is now considered a property interest and alienability is an inherent characteristic of a property interest.

III. Right of Entry: When a grantor creates an estate subject to a condition subsequent and retains the power to cut short or terminate the estate, the grantor has a right or entry (aka power of termination). Like reverter, cannot be created in grantee.

A. Alienability: At common law, a right if entry was inalienable inter vivos because it was treated as a chose in action and choses were inalienable. It was not thought of as a property interest, but rather a special right in the grantor to forfeit the grantee’s estate of he wished. Right of entry was inheritable by the heirs of the grantor.

B. Termination: Right of entry of possibility of reverter could endure indefinitely and because it was inheritable, the grantor’s heirs could exercise the right years after the grantor’s death. These interests were not subject to the Rule against Perpetuities. Some states have limited the time that can exercise the right.

Villiage of Peoria Heights v. Keithley (286): Gilbert conveyed property in fee simple upon condition subsequent to P (Village) on the condition that the property be used for a public nature. Gilbert conveyed his present and future interest to D. Can D exercise power to terminate for failure to meet condition?

Crt: No; D had no title because at the time Gilbert executed his deed to D Gilbert has no interest capable of being assigned or conveyed

A breach of the condition can only be taken advantage of only be the grantor or his heirs. The grantee (D) acquires no right to enforce the forfeiture. The law does this to protect grantors from themselves

Trustees of Calvary Presbyterian Church v. Putnam (288): 66 years before this case, D conveyed land on condition that it be used for religious purposes, and providing that P and their heirs could re-enter and take possession upon breach (thus conveying a fee simple on condition subsequent w/ right if re-entry for condition broken). 35 years ago all of P’s heirs gave a quitclaim deed covenanting that upon breach, P’s heirs would not try to enforce the condition. P seeks declaratory judgment regarding title. Crt ruled for P

The policy of the law encourages the release of remote contingent rights in an estate to parties already possessed of some substantial estate (in this case substantial estate = fee upon condition subsequent)

No rule of law is invoked which would tens to prevent the living heirs; prior to a breach, from waiving a right or a possible rights of which they could thereafter divest themselves.

Why there is a difference bt Keithly and Putnam: The law is clear: a release (Putnam) is treated differently than a conveyance (Keithly). Note: in Putnam crt rules “in respect to remote contingent rights in an estate, the policy of the law encourages their release to parties already possessed of some substantial estate.” Eg. O A on fee upon condition subsequent. O dies leaving X,Y,Z. Under Putnam X,Y,Z can release to A

Long v. Long (290): see book for facts

Remainder: future interest created in a grantee that is capable of becoming a present possessory estate on the expiration of a prior possessory estate created in the same conveyance in which the remainder is created. It is called a remainder because on the expiration of the preceding estate, the land remains away instead of reverting to the grantor. A remainder never divests or cuts short the preceding estate; waits till the preceding estate expires. Eg. O A for life, then to B if B is then living. B has a remainder because B’s interest is capable of becoming possessory upon the termination of the life estate. I. Characteristics of Remainders

A. Preceding estate: a remainder can only be created by express grant in the same instrument in which the preceding possessory estate is created. Unlike a reversion, it cannot arise by operation of law. If no preceding estate has been created in a transferee, the future interest is not a remainder. (eg O A if A marries B; A does not have a remainder because the preceding estate was created by O in anyone; A has an executory interest.

B. Must follow a fee tail, life estate or term of years: A remainder can follow any of these estates, but not a fee simple.

C. Must be capable of becoming possessory on natural termination of preceding estate: a remainder cannot divest a preceding estate prior to its normal expiration. A divesting interest in a transferee is an executory interest, not a remainder. (eg. O A for life, but if B returns from Rome during the life of A to B in fee simple; B has shifting executory interest; not a remainder)

1. No remainder after a fee simple; not even a fee determinable: O A and his heirs, but if B dies w/o issue, to B. B has an executory interest, not a remainder.

II. Classification of Remainders: Remainders are either vested or contingent

A. Vested Remainder: a remainder created in an ascertained person and not subject to a condition precedent.

1. Class gifts: a gift to a group of persons described in a class, eg. children of A. A class is either open or closed; it is open of it is possible for other persons to enter the class. In a gift to the children of A the class closes at the death of A

2. Alienability: vested remainders are alienated inter vivos and devisable by will and descends to heirs if not otherwise disposed of.

B. Contingent Remainder: a remainder is contingent if it is either limited to an unascertained person or is subject to a condition precedent.

1. Remainders in unascertained persons: means that the person has not been born yet or cannot be determined until the happening of some event.

a. Eg. O A for life then to A’s children. A has no children. The remainder is contingent because the takers are not ascertained at the time of conveyance. If A has a child, remainder vests in that child subject to open and let in other children born later.

b. Eg. O A for life, then to B’s heirs. B is alive. Since there are no heirs to the living, takers are not ascertained and the remainder is contingent. B’s heirs will be ascertained at his death. If B dies before A does, remainder vests in B’s heirs at B’s death. *Heirs means those persons who succeed o B’s property if B dies intestate (w/o a valid will). They are set forth by the descent of distribution.

c. Note: In both of these examples there is a reversion in O. Whenever O creates a contingent remainder in fee simple there is a reversion on O. Whenever O creates a vested remainder in fee simple, there is never s a reversion in fee simple in O

3. Remainders Subject to a Condition Precedent: A remainder subject to a condition precedent is a contingent remainder. A condition precedent is an express condition set forth in the instrument, that must occur before the remainder becomes possessory.

a. Condition precedent: condition expressly stated in the instrument. Eg. O A for life, then to B if B marries C. B has a remainder subject to a condition precedent (marrying C). If B marries C during A’s life, the remainder vests indefeasibly in B.

b. Precedent v. Subsequent: depends on the words of the document. If the conditional element is incorporated into the description of or into the gift to the person taking the remainder, then the remainder is contingent, but if after words giving a vested interest, a clause is added divesting it, the remainder is vested.

c. As matter of policy, if instrument is ambiguous, the law favors vested construction rather than a contingent one. Browning

4. Alienability: Vested remainders have always been alienable inter vivos and divisible be will. Contingent interests (contingent remainders and executory

interests) were not alienable inter vivos at common law except in equity for a valuable consideration, by doc of promissory estoppel or where released to the owner of the property interest. Modern law: contingent remainders are alienable inter viovs. But if remainder is contingent because the limitation is to an unborn person, there is no one to make conveyance, so the interest in inalienable

a. Creditors: Generally, creditors can reach any alienable property interest the debtor has. Rule: if debtor can voluntarily transfer it the creditor can reach it

D. Why Classify? Vested remainders were favored and contingent remainders were not; judges thought they made the land inalienable. Therefore there are rules to curtail contingent remainders: 1) rule of destructibility of contingent remainders; 2) Rule in Shelly’s case; 3) Doctrine of Worthier Title; 4) Rule against Perpetuities. In addition vested remainders were alienable while contingent were not.

III. Rule on Shelly’s Case: if a will or conveyance creates a freehold in A, and purports to create a remainder in A’s heirs (or in the heir’s of A’s body) and the estates are both legal or equitable, the remainder becomes a fee simple (or fee tail) in A. Eg. O A for life, remainder to A’s heirs. If no rule the title would be: life estate in A, remainder in A’s heirs, reversion in O. But w/ rule: life estate in A, remainder in A (not A’s heirs). Then by the doctrine of merger, A’s life estate will merge into his remainder in fee simple and A would have a fee simple.

A. Reasons for Rule: makes it more likely that land will pass by descent rather than by will or conveyance. Eg. Take above hypo. If A had a son, B (A’s sole heir) at A’s death B would take the property by descent (at least prior to the statute of wills). But if there was no rule, B would take as a remainderman. Passage of land by descent gave benefits to the lord of the manor and thus helped maintain the feudal order (device for evading taxes).

B. Requirements: 1. There must be a freehold estate given to the ancestor (term of years and

personal property do not suffice). In US only a life estate.a. Future freehold: Freehold doesn’t have to be a possessory at

present; the life estate itself can be a remainder2. There must be a remainder and it must be in the heirs of the ancestor of heirs

of the ancestor’s body.a. Cannot be an executory interest. b. Remainder must be to the heirs of the ancestor; the one to

whom the freehold was given. Thus if O A for life, remainder to the heirs of B, the rule doesn’t apply.

c. Remainder must be to heirs; not children. Children are not the same as heirs; widow plus children = heirs. * Look for intent!!

d. Could be a fee tail, but most states have abolished the fee tail. 3. Life estate on the ancestor and the remainder to the heirs must either be both

legal or both equitable. Eg. O T for life of A, in trust to collect rent and pay to A, remainder to A’s heirs. Rule doesn’t apply because. T has legal life estate, A has an equitable life estate and A’s heirs have a contingent legal remainder in fee simple.

4. Co-tenancy: what if the life estate or remainder are held on co-tenancy?

a. If both are held in co tenancy, the rule applies to the entire joint interest: O A and B for their lives, remainder to the heirs of A and B, then A and B get a remainder in fee simple as co-tenants

b. If only remainder in co-tenancy: O A for life, remainder on B and A’s heirs, then A will have a ½ interest in the remainder and the it will merge with the ½ of the life interest and will give him a ½ interest in fee simple and ½ interest for life.

c. If only life estate in common it’s more difficult, most crts give entire remainder into one fee simple: O A and B as tenant in common, the to A’s heirs, would give A a fee simple

5. This is a rule of law, so even if testator’s intentions are otherwise, rule still applies

6. Most states have abolished the lawa. Where the rule applies, drafters avoid the rule: O A for 100 years if he so long lives, then the heirs of A: Rule would not apply because A has a term of years and not a freehold. Or O A for life, then one day after A’s death to the heirs of A; executory interest rather than a remainder, so rule would not apply.

IV. Doctrine of Worthier Title: One cannot either by conveyance or will, give a remainder to his own heirs. Like Rule in Shelly’s case, tends to make property pass by descent rather than by purchase.

A. Inter vivos (by will) conveyances: still in effect today1. Rule: of the owner of a fee simple attempts to create a life estate or a fee tail

estate, w/ a remainder to his own heirs, the remainder is void. Thus the grantor keeps the reversion. O A for life, remainder to O’s heirs: void and O gets a reversion, which he can convey to a 3rd party. Why wouldn’t O just give himself a reversion???? Why make it in the heirs in the first place???

2. Practical effect: if doctrine did not exist, the grantor’s would have a contingent remainder, which would not be affected by any conveyance made by O or any other devise made in O’s will. W/ doctrine, remainder is nullified and an inter vivos conveyance or a devise in his will of the reversion will keep the heirs from takinga. This allows a settlor to terminate a trust that he has created: O T as trustee to pay income to O for life, then to O’s heirs. The doctrine nullifies the remainder in O’s heirs and thus if O wants to terminate the rust he can w/o the consent of any one else

B. Rule of law so if O intends to leave a remainder in his heirs he can’tC. In common law, rule as been transformed into one of construction such that it only

applies when the grantor intended to keep a reversion; establishes a presumption that a reversion rather than a remainder is intended.

D. Common-law doctrine only applies to realty and not personal property, but many state have changed such that it applies to personal property

Creation of Remainders:

McRorie v. Creswell (294): George in will gave land to wife and daughter Rosanna their lifetime. Provided Rosanna has no heirs, then to his son, for his lifetime, then to his son’s heirs. Rosanna convyed her property to X who quitclaimed it to Y, which D (Y’s son) inherited. P are Rosanna’s heirs.

Rosanna had a life estate and P had a remainder. She conveyed to X her life estate and thus his quitclaim gave Y a life estate per autre vie, which D inherited.

Crt found for P because unless there is contrary intent of the testator, the crt assumes that a conveyance to “B for life, and if B does w/o issue, then to C” creates a remainder in B if B dies w/ issue

Rule in Shelly’s case and Doc of worthier titleStewart v. Merchant’s Bank (298): P set up a spendthrift trust for himself and wanted to revoke before the ten years was up. Issue: whether P was the sole beneficiary of the trust; whether trust created an interest in P’s heirs such that their consent was necessary to revoke the trust.

Crt held that consent was not required because clear that P did no intend to vest an interest in them

Classification and Characteristics of Remainders:Ryan v. Monaghan (302): Clause of will: property to wife and at her death to heirs of James and if James does w/o issue and umarried to testator’s brothers and sisters (P), share and share alike. Wife died, so life estate ended. James was and continued to be unmarried. P filed suit because James was not covered by the clause and they were owners in fee.

Testator intended wife to take life estate, but for some reason left James out. The heirs of James were thus given a contingent remainder, but since nemo est haeres viventis, the estate feel to the ground because James is alive.

P clearly does not take because their interest rests on the contingency that James dying w/o issue unmarried.

By operation of law goes to testator’s only heir: JamesBuckley v. Buckley (303): see notes for facts

Vesting estates is favored; unless testator clearly intended otherwise, persons who take under a will as a designated class must be determined at the time of death of the testator and the estates given to them vest at that time.

Danz v. Danz (307): Testator died, widow renounced the will and elected to take her statutory share, which was ½ of the property (testator had no issue). The will devised a life estate to widow, and upon her death or remarriage the remainder to his brother’s (Al) son Ed and other brother’s daughter Margaret, but “in the event of the death of wither of them before the death or remarriage of the widow… and if Margaret dies w/o issue, goes to brother and his son Ed.

Crt said that remainder to Ed and Al was vested and not contingent Does renunciation accelerate the remainder, so that the remaiderman become entitled to

the present enjoyment of the estate? Clear that testator was trying to provide for widow, so when she renounced the will, no longer requires the support provided in the will, so it is not necessary to postpone the remainder until her death.

Can remainder be prevented from accelerating because of the executory devise which takes effect should the remainderman die before the time of distribution? Exec devise is destructible by arrival of period of distribution and testator’s period of distribution (determined by widows need for the estate), had arrived because of renunciation and thus the contingency of death of the remainderman prior to time for division no longer exists, and the remainder vests absolutely.

Black v. Todd (310): A daughter for natural life, the to children of daughter but if she has no children then to Mary Brown.Item 4: All property I will to MB, I give to executors for her sole and separate use during the term of her natural life, and at her death to her children if any or to any child or children of any deceased child of said MB, and if she dies w/o any heirs of her body, I give the same grandson, Sam.

1st possibility is that at the death of Harris it’d go any the surviving children. There wasn’t one, so that both fails. 2nd path to MB, who was to get life estate at her death children or grandchildren of none to Sam

Question is whether Mary children’s can take under the original will. A contingent remainder is not alienable and not transmissible. If this a contingent the Ryland’s devise for the house to the defendants was of no effect at all

Contingent remainder is transmissible since the takers here are fixed. If she’s alive it is a contingent remainder. Since they know who will take this remainder is transmissible

Neither the life estate limited over to Brown nor remainder over her children was conditioned on Brown being in existence

Browning v. Sacrison (312): Is the remainder to O’s grandchildren and brother vested or contingent at O’s death. “Give and devise to Ada a life estate w/ remainder at death to grandsons, or if either of them be dead the all to the other.” P relies on early vesting of estates since as a policy reason it facilitates alienability to a considerable degree. However this is no longer the rule in American law. Traditional presumption though is early vesting of estate

No favor of vesting because of tax consequences Middle ground has emerged from tax v. early vesting rather than an outright rejection of

rule; must look at pros and cons. Majority says even though everyone wants to minimize tax, judges are not tax planners; must look at language of instrument itself; the overall scheme of distribution and surrounding circumstances??

The Statute of Uses and Executory Interests: A. Seisin: A person has seisin of land if he 1) has possession; 2) has a freehold estate in

the property (fee simple, fee tail or life estate). Thus before the “deed” a freehold was generally transferred by livery of seisin (feoffement), which required that the transferee go onto the land and transferor would give him a twig (transfer of seisin) and the transferee would take immediate possession

B. Common law had restrictions on the types of estates that could be created: 1. No spriging interests: a feehold estate could not be created to commence

futuro: O A and his heirs form and after A’s marriage to D was invalid. Caveat: O A for 10 years then to B

2. No shifting interests: a grantor could not give any grantee an estate that would cut another estate short. O A and his heirs so long as used for X during the next 5 years, then the B was invalid. Fee simple (even determinable one) were unable to be followed by a remainder, thus B’s interest was not considered a remainder and thus was a shifting interest, which was invalid. * this rule did not apply to leaseholds, thus O A for life, then to B for ten years, but of B uses for X, the to C is okay

3. No gap bt estate: there could be no gap bt the end of an estate and the start of a succeeding remainder

4. A freehold contingent remainder could not be supported by a term of yearsC. Statute: Court of Equity would enforced use which gave landowner more flexibility,

so statute was passed: where one person is seised of land to the use of another person, the latter shall be seised of the same size estate as he had in use; the equitable estate is converted into the corresponding legal estate. O T and his heirs to the use of A and his heirs; transforms A’s equitable title into legal title. *The statute does not apply if the person who is holding it for the use of another is not seised: O T and his heirs for 99 years, to the use of A…; the statute does not apply because T does not have a freehold

D. Effect of Statute: Allowed type of conveyancing that had previously been employed to create uses to be utilized now for the purpose of creating legal estates

1. Bargain and sale: Before statute bargain and sale could be used to raise a use (agreement by which the owner promised to sell the land to another or hold it for the other’s use). After Statute, b&S became powerful way to transfer legal title, because no livery of seisin was necessary; could just go to office

E. Future Interests after Statute1. If interest takes place after the date of coveyancing is now executed into a

legal estate and is called a springing executory interest. O A and his heirs after date of A’s marriage to B, thus use in A is raised and exeuted under the statue to commence upon mariage

2. Shifting executory interests were okay: O A and his heirs, but if ever used for X then to B and his heirs. B&s raises a use in fee simple subject to a condition subsequent and a use in B. Statue executes the uses: fee simple in A subject to an executory limitation, shifting executory interest in fee simple in B.

3. There could be a gap bt two interests4. Possible to have a legal contingent remainder after term of years5. Provided a way to avoid Rule in Shelly’Case: O bargains and sells to A for

life and one day after A’s death to A’s heirs. B&s raises use in A for life and a springing interest in A’s heirs. Statute executes the uses: life estate in A, springing executory interest in A’s heirs. Rule in Shelly’s case doesn’t apply because the heirs take by executory interest rather than by remainder

F. Executory Interests:1. Use required: an executory interest can be created only be a coveyance that

raises a use (usually b&s). Thus where coveyance is through a feoffment, no executory interest is created. *Statue can create reversions, remainders, etc

2. Cannot be created in the grantor3. Executory interest v. Remainder: Both are created in persons other than a

grantor. Remainder never cuts off a prior interest and waits until it’s natural termination. An excretory interest usually divests, or cuts off a prior interest before it’s natural termination

a. Use same test as for conditions precedent and subsequent: if the condition is incorporated into the clause which gives the gift to the remainderman , then the remainder is contingent, but if one clause creates the remainder and a subsequent clause takes the remainder away, the remainder is vested (subject to divestment)

b. Exception to the rule: if an interest following a fee simple determinable is in a stranger (rather than the grantor, which would make it a possibility of reverter) that interest is an executory interst

G. Doctrine of Purfoy v. Rogers: Rule that no limitation capable of taking effect as a contingent remainder, shall, if created inter vivos, be construed as a springing use under the Statute of Uses. Also no limitation created by will capable of taking effect as a contingent remainder will be construed to be an executory devise under the Statue of Wills.

1. Effect of Purefoy was to maintain the destructibility doctrine 2. In places where the destructibility doctrine has been abolished, there is no real

difference bt executory and interest and contingent remainder and the Purefoy rule is not of great importance, but where destructibility has not occurred there is an importance difference

H. Unexecuted uses: 1. Use on a use does not fall w/in the statute; it only works once: O bargains and

sells to T and his heirs as trustees for the use of A and his heirs. B&s creates a use in T and the use in A is not executed under that statute and remains an equitable interest; T must run the property for A’s benefit.

2. Active Trust: Statue of uses was directed for situations where the legal title was a sham; the actual possession of the property was in the equitable owner. Thus where the holder of the legal title took a more active interest in the property the Statue has not always been held to apply. For eg if the legal titleholder occupies the premises and pays rent, then it is considered an active trust and the Statute is inapplicable

Blackmun v. Fysh (317): Testator devises land to his son for life and after his death to “unto, between and amongst all and every child of my said son, whether now or hereafter born, who shall attain the age of 21…” followed by what looks like a restraint on alienation

Crt says it is the intention of testator that every child of his son who should attain 21 should take. If first part stood alone, the limitations to children of the son would be contingent remainders, but the forfeiture clause defeats the life estate before its natural determination and the limitations to take effect in that premature determination are not contingent remainders, but executory devises.

Powers of Appointment: A power given by the owner of the property (the donor) to another person (the donee) to appoint the taker of the property (the appointees). Exercise of the power is not mandatory and the terms may be circumscribed in particular ways. Traditionally, appointees take property by virtue of the original grant form the donor, but only becomes known after donee has exercised the power.

A. Varieties of Powers:1. General Powers: Enables the donee to appoint to any person including herself of

her estate2. Special Powers: One which limits the exercise of the estate in favor of a person

or other than the donee or his estate 3. Power purely collateral: When the donee has interest in the property

Gilman v. Bell (320): Testator’s will devised a life estate in Ellen Bell, wife of his son Robert for life of Robert (life estate per autre vie). Creditor tried to take property because Robert has power of appointment.

Crt held that no title or interest vests in the donee of the power until he exercises the power.

Bank of Dallas v. Republic Nat’l Bank of Dallas (321): Frewell created a spendthrift trust for the use and benefit of herself and her children. Settlor (Frewell) gave herself all of the net income, but the corpus was for her and her children. Issue: is whether the creditors can garnish the income and the corpus.

General rule: if spendthrift trust created by a settlor for others, no part can be garnished by creditors, but rule is different settlor creates a spendthrift trust and makes himself the beneficiary; but where the settlor creates a trust for his own benefit and interests and has spendthrift clause, it is void as far as the present and future creditors and they can garnish the trust.

Crt held that could reach corpus also; If the settlor reserves for his own benefit not only a life estate, but also a general power to appoint the remainder by deed or will, his creditors can reach the principal of the trust as well as the income.

In Re Rowland’ Estate (325): Eva Rowlands, a widow died testate and gave Cuthbert’s the right to distribute $ “to any of her close friends” and to “please give generously to Maria,” the maid. Cuthberts thought they had a general power of appointment and tried to appoint to it to themselves. Maria, maid objected.

Any of close friends is not imperative, but Maria was specifically mentioned, so Cuthberts had special power; they were restricted to passing property to a certain group of people.

Rule Against Perpetuities: “No interest s good unless t must vest, if at all, not later 21 yrs after some life in being at the creation of the interest;” an interest is invalid unless it can be said w/ absolute certainty, that it will either vest or fail to vest before the end of the period equal to 1) a life in existence at the time the interest is created plus 2) an additional 21 years

A. Purpose of the rule is to promise the free alienability of landB. Interests to which the Rule applies: For the rule to have any force, the interest must

be one that is contingent, ie not automatically vested at the time it is created.1. Contingent Remainders: Important to distinguish between vested and

contingent remainders because vested remainder is vested from the moment of its creation whereas a contingent remainder violates the rule if it might not vest or fails before the end of lives in being plus 21 years

2. Vested remainders: A vested remainder, by contrast ,can never violate the Rule. A vested remainder ,by definition, vests at the moment it is created. This is true even if possession is not to occur until the future; the important thing is that the remainder vests “in interest”, not possession, immediately

3. Reversionary interests not w/n Rule: the rule does not apply to reversionary interests (ie reversions, possibilities of reverter and reverter and rights of

entry). This is because these interests, like vested remainders, are deemed to vest as soon as they are created

4. Executory interests: An executory interest is not vested as its creation.5. Options to purchase land: an option to purchase land will often be subject to

the rulea. Option as part of lease: if an option to purchase property is part of a

lease of that property and is exercisable only during the lease term, then the option is not treated as being subject to the to the Rule. Theory behind this exclusion is that the option gives the lessee an incentive to improve the property and does not really restrict alienability very much

b. Options in gross: but if the option is not part of a lease or other property interest, most states hold that the rule does apply

6. Preference for the Rule in ambiguous cases: Where two interpretations of a grant are possible, the crt will normally prefer the interpretation under which the Rule would apply. This is because crts attach great importance to the public policy behind the rule—the encouragement of property transferability.

C. Meaning of “lives in being”: Normally a conveyance or bequest will mention a person as to whom it can be said that all interest will vest w/in 21 years after the person’s death. For instance, O conveys to “my daughter D for life, then to her first child to reach the age of 21.” Know that D is alive at the date of the conveyance and that nay child she has will have to reach 21 w/in 21 years after D’s death. Therefore, D would be the measuring life in this conveyance, and the contingent remainder to D’s children is valid

1. Measuring lives too numerous: The measuring lives named in the conveyance must not be so numerous

D. Special Situations: 1. Presumption that any person regardless of age is capable of having children2. Unborn widow: If an interest is created that will flow through the widow of X

(by naming and relying on hr in determining when the interest will vest, the common law view is that the interest must fail. The widow is not necessarily the person who is married to X when the interest the interest is created. X could later marry someone born after the interest is created, who would not be a relevant life-in-being for the purposes of the vesting of the interest in question. Since the “unborn widow” might live longer than 21 years after the death of X, the only life in being, the interest might not vest w/in 21 years of X’s death and is therefore invalid under the Rule.

3. Happening of the event: a gift is sometimes drafted in such a way that vesting will only occur after a certain event (eg payment of a debt). Some crts have held that the event might take place after the 21 years and the gift which is to vest after that event is therefore invalid.

4. Shifts bt charities does not violate rule5. Gestation: period of gestation may be added to the lives in being plus 21

years. Thus suppose O bequeaths property “to A for life, then to A’s first son to reach the age of 21.” A is man. It is possible that A might die w/o any living children, but w/ a pregnant widow. W/o exception for the period of

gestation, it would take the unborn child 21 years plus up to nine months to reach the age of 21, making his interest invalid. The period of gestation exception renders the child’s interest valid.

6. Class gift: If a gift is made to all the members of the class, the entire gift fails unless it can be said that each member of the class must have his interest vest or fail w/in the lives in being plus 21 years. The problem usually arises where the class obtains new members following a testator’s death

7. Doctrine of Wait and See: Under rule, validity of an interest is to be measured as of the item it is created; if have a situation whereby the interest might vest too remotely, it is invalid regardless of how things actually turn out. But w/ wait and see, validity of an instrument is determined at the time it vests; if the interest actually vests w/in lives in being at the time of creation plus 21 years, the fact that things might have worked out differently is irrelevant. Eg. O A so long as used for school, then to B and her heirs. The gift over to B violates the rule, but a crt may reform the gift by holding that B’s interest is valid for D’s life or 21 years or for B’s life + 21 yrs. Motivated by policy of making land marketable, B’s interest does not vest w/in the time allotted, A has a fee simple

8. Doctrine of Cy pres or Equitable Reformation Doctrine: Power of a crt to reform invalid gifts in order to carry out the general intent of the donor when his specific intent cannot be given effect. Usually applies to only charitable gifts that fail, never gifts to private beneficiaries

United Virginia Bank/ Citizens & Marine v. Union Oil Co. (329): A Union Oil, option to purchase land. 120 day option period to begin at the time the City of Newport News acquires the right of way to Boxley.

W/ corporate entity there are no lives and therefore it is only 21 years As applied to the option agreement the rule says that option might be postponed beyond a

period of 21 years from the date of the agreement If an option to purchase land can be exercised beyond the perpetuities period the option is

void Doctrine of wait and see and “cy pres” were argued by the D but they lost

Jee v. Audley (333): Audley wife 100lds for life, then at her death to his niece, Marry and issue of her body lawfully begotten and in default of such issues to be equally divided between the daughter then living of the Jees.In Re Manson’s Estate (334): O T in trust w/ income to go son, and at death of son pay principal issue surviving him, but if has no issues then income of trust to his wife foe her life and at her death to my daughter D, or if she be dead at that time, to her lawful issues then living per stirpes and not per capita

Where a secondary life estate is limited upon the life of any wife whom the primary life tenant might marry, it is void as having violated the rule

Crt says since the remainder in daughter is contingent and cannot be accelratedSears v. Coolidge: Inter vivos trust w/ reservation in settlor to change the terms. Net income of trust was payable 1/3 semi-annually to such of the issue of my deceased son as shall be living at the time of each such semi-annual payment, 2/3 divided into three parts payable semi-annually,

one part each to M and S and after their death to their respective issue and one to the living issue of E. Distribution to take place on 1) the death of the last survivor of those of my kids, grandkids, and great grandkids surviving at my death 2) attainment of 50 years of my youngest grandkid at my death

Split Contingencies: when a trust instruments contains two alternative conditions one of which is too remote and the second of which actually occurs, is not too remote, the rule is not violated

Doctrine of Second Look: the validity of the remainders must in any event be determined in the light of the facts existing at the death of the testator to see if the rule actually violated the rule

T fund in trust to A for life and then among A’s issue as A appoints and in default of appointment to A’s children who reach 25. If A does not exercise the power or exercises it invalidly the gift in default of A’s death is judged in the same manner as the exercise of the power is judged. If all of A’s children are four or more years of age at A’s death, the gift in default is valid. If any child of A is under the age of four at A’s death the gift in default is void. Delaware Code: No interest created in personal property held in trust shall be void by

reason of any rule against perpetuities, whether the common law rule or otherwise. This has allowed for the creation of “dynasty trusts” that can last forever. Is this a good change to the law or should the utility of the common law be preserved